2016 New Lease Accounting Rules – Executive Summary
From presentation given on Dec 15-16 at Philadelphia Hyatt Bellevue
Financial Accounting & Reporting Update Conference
See similar upcoming CPE Conferences here: 2016 Schedule of CPE Conferences by ACS
By Dave Christensen of RGP: As a Managing Consultant at RGP, Dave works as a part of RGP’s client service team focusing on the delivery of multiple engagements in support of its advisory services. He has extensive US GAAP expertise and is currently focused on revenue recognition efforts. Prior to joining RGP in 2015, Dave spent 9 years with United Services Automobile Association (USAA) as the Assistant Vice President of Accounting Policy and External Reporting, 3 years with GE Insurance as the Lead Technical Accounting Advisor, 5 years at the National Association of Insurance Commissioners as the Statutory Accounting Principles Manager and 6 years as an audit manager at Deloitte & Touche.
FASB Announces new rules: link to FASB website announcement
Dave began the presentation with an executive summary of the long history, impetus and background of the FASB project.
For lessees: most leases will be on the balance sheet
Leases will be classified into two types: Type A- similar to today’s capital leases and Type B- similar to today’s operating leases
Income statement recognition pattern will depend on lease type
Additional disclosures
For Lessors: Type A – similar to today’s sales type of direct financing leases (initial selling profit deferred if lessor does not transfer control) Type B leases similar to today’s operating leases
Leveraged lease model is eliminated
Additional disclosures
David continued with a deeper dive into the scope and definition of leases, lease identification, identified asset, short-term leases, separating lease and non-lease components, contract combinations, portfolio approach, lease terms, lease payments, discount rates, implicit interest examples, economic life, fair value, lease classification, lessee accounting, disclosures and examples.
See similar upcoming CPE Conferences here: 2016 Schedule of CPE Conferences by ACS
