As a follow-up to our earlier Lease Tip, The Impact on Corporate Real Estate of Lease Accounting Changes under GAAP, we have compiled a list of the most instructive resources covering the effects of the proposed accounting changes by FASB/IASB.
KBA is preparing comments for submission to the FASB/IASB boards. Our focus is on the treatment of operating expenses and the inclusion of option periods in determining the length of leases. Lend your support to KBA’s comments.
If you know of additional resources on this topic and would like KBA to list them in this Index, please contact Lou Ferro, CPA, Sr. VP Audit Services, KBA Lease Services, email@example.com or 888.750.4500 ext. 405.
The Financial Accounting Standards Board (FASB) is a private organization recognized by the United States government and the accounting world as the authority on accounting rules. Since every company with publicly-traded stocks or bonds must comply with Generally Accepted Accounting Principles (“GAAP”), by default they must comport their accounting standards to FASB’s regulations. The proposed changes to accounting for leases are a joint effort between the FASB and the International Accounting Standards Board (IASB). FASB’s regulation of lease accounting was contained in FAS 13, issued in 1976. Although FAS 13 has been “superseded” by the new FASB codification compiling all lease accounting rules and relevant guidelines in section ASC 840 (select the FREE basic view at the bottom of the page), the substance has remained materially the same. The IASB’s corresponding lease accounting provision is found in IFRS 17. There are some marked differences between the current ASC 840 (FAS 13) and IFRS 17’s treatment of leases; a clear comparison is available here.
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