On November 11, 2015, the FASB voted to proceed with finalizing a new lease accounting standard. The final Accounting Standards Update (ASU) is expected to be published in early 2016. The standard has the potential to affect every entity’s financial reporting.
The core principle of the new leases standard is that lessees should recognize assets and liabilities arising from all leases, except for leases with a lease term of 12 months or less. This will significantly gross-up many entities balance sheets.
Public entities are required to adopt the new leases standard for reporting periods beginning after December 15, 2018. Nonpublic entities have an extra year to adopt. Early adoption is permitted.
IASB Leases Standard
On January 12, 2016, the International Accounting Standards Board issued its much-anticipated leases standard, IFRS 16. The standard will require all leases to be reported on a company’s balance sheets as assets and liabilities.
IFRS 16 began as a convergence project with the FASB. However, the
boards were unable to reach consensus on some key issues, and some
significant differences between IFRS 16 and the new FASB standard
remain. For more information about the IFRS 16, see the IASB’s webpage
The AICPA is closely following the development of the FASB’s Leases standard and is in the process of creating resources that will help members implement the new standard with ease. Please check this page often, as we will be adding valuable tools frequently.
News and Views
IASB Issues Leases Standard, FASB to Follow Journal of Accountancy, January 2016.
Lease Accounting Standard Gets Preliminary Approval Journal of Accountancy, January 2016.
FASB's Leases Standard Gets Preliminary Approval Journal of Accountancy, November 2015.