The Financial Accounting Standards Board is preparing to propose a modification to the pending lease accounting standard to amend the transition guidance.
In a recent FASB meeting, the board decided to modify the transition provisions in Topic 842 of the Accounting Standards Codification, which takes effect for public companies in 2019, for certain land easements that existed before the effective date. The board has instructed its staff to draft an accounting standards update for public proposal and comment.
The board plans to introduce a practical expedient to give companies an option to not apply the new accounting to land easements existing before the effective date, provided the entity does not already apply current lease accounting guidance to those same easements. That means FASB plans to tell entities to continue to apply their current accounting policies, whatever those may be, to accounting for land easements that existed before the new accounting standard takes effect.
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