Companies wouldn’t have to apply the new standard to 2017 and 2018 leasing results.
The recently proposed tweaks to the Financial Accounting Standards Board’s new leasing rules represent a big breather for the many public companies racing to comply with the standard by its January 1, 2019, deadline, a lease accounting expert says.
The FASB decision about the new leasing standard likely to have the most widespread effect on companies would give them a pass in applying the new rules to their 2017 and 2018 financials, according to James Barker, Deloitte’s senior consultation partner for lease accounting
The standard would only apply to new leasing arrangements. Under the current standard, companies “would be required to recast 2017 and 2018 to reflect the effects of the new leasing standard. You’re basically restating those periods in the year of adoption,” Baker says.
But at FASB’s meeting last week, the board tentatively decided to issue an accounting standards update that would, among other changes, shed that requirement.
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