FASB approves technical corrections to new leases guidance (ASC 842)
KPMG reports that on January 24, 2018, the FASB agreed to finalize its previously proposed technical corrections to the new leases standard. The FASB decided to finalize the previously proposed technical corrections without any changes from the proposed ASU.
Applying the new leases standard
- All companies within the scope of ASC 842
- Effective date will coincide with the effective date of the new leases standard for companies that have not early adopted.
- For companies that have early adopted the new standard, the final ASU will be effective upon issuance.
Technical Corrections to ASC 842:
- Includes 16 technical corrections to the new leases standard and other accounting topics alleviating unintended consequences from applying the new standard
- The Board approved the proposed updates with no modifications from the proposed ASU
The FASB also discussed the following issues but will not amend the standard:
- Transition guidance for amounts previously recognized in business combinations in paragraph 842-10-65-1(h)(3). The FASB staff will include educational information on the FASB Implementing New Standards web page that the effect of these amounts in transition will likely net to zero
- Guidance on lessor recognition of variable payments. The FASB staff will include educational information on the FASB Implementing New Standards web page clarifying that variable payments allocated to nonlease components should be recognized in accordance with ASC 606