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Discuss "FASB and the New Leasing Standard"


Discuss "FASB and the New Leasing Standard"

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Expert Solution

  • The FASB decided that its lease standard will be effective for public companies with fiscal years (and interim periods within those fiscal years) beginning on or after December 15, 2018. For private companies, the standard will be effective one year later.
  • Under the new stnadard, FASB has taken care the users of FS are given more information with less complexitiies.
  • In the new standard, company have to report current off balance sheet leasing activities leading to assessment of lease-buy decisions
  • Outstanding leases will come on balance sheet of the companies too.
  • The new assets recognized for operating leases will change companies’ book/tax difference computations and could affect certain state and local tax apportionment calculations and transfer pricing.
  • New FASB shall also retain the previous two types of leases, and is consistent with the lessee accounting model under existing GAAP.

ekkarill92 answered 2 years ago
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