On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842). The new guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases.

The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for any of the following:

• A public business entity, as defined in generally accepted accounting principles (GAAP).
• A not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market.
• An employee benefit plan that files financial statements with the U.S. Securities and Exchange Commission (SEC).

For all other organizations, the new guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

Early application is permitted for all organizations.

The Financial Accounting Standards Board (FASB) issued a formal proposal aimed at reducing the costs and complexity associated with complying with the new lease accounting standard.

FASB has invited all stakeholders to review the Accounting Standards Update (ASU) and provide comments by February 5, 2018—this is a rare opportunity to provide feedback that could offer significant relief for companies having to comply with the new standard. If these proposed changes represent a positive or negative impact to your company, you are encouraged to provide feedback to the FASB.

If you are interested in providing comments to the FASB, you can submit them in one of three ways:

• Using the electronic feedback form available on the FASB website at Exposure Documents Open for Comment
• Emailing comments to director@fasb.org, File Reference No. 2018-200
• Sending a letter to “Technical Director, File Reference No. 2018-200, FASB, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116.”