Nearly ten years after introducing its lease accounting standards, the FASB is concluding a formal review of the lessons learned.
Known as Accounting Standards Codification 842, the new rules required the disclosure of operational leases on the balance sheet, both as an asset and a liability, in the same way as capital leases.
In a recent meeting, FASB staff summarized the results of its post-implementation review that sought feedback on the major standard from over 1,000 stakeholders, including investors and report preparers.
The review revealed that the costs of compliance were “significantly higher” than anticipated, with an average implementation cost of about $450,000 per company. Read more takeaways.