Lessee accounting to support ASC842 Financial Reporting Rules for Operating Leases

Description

A joint project of Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) that aims to:

(a) improve financial statement users' understanding of lessees' lease obligation

(b) result in a more transparent and faithful representation of the rights and obligations arising from leases

(c) improve the understanding and comparability of lessees' financial commitments regardless of how the lessee finances the assets used in its business

(d) reduce opportunities for entities to structure leases to achieve a particular accounting outcome on the balance sheet. To do this, a new lease type and depreciation method is needed for the Lessee Accounting to support ASC 842.

Limitations

- Operating lease does not support the purchase option and create new version of the agreement.

- Equipment is not linked to this development. Item and lot number are used for information purposes only.

- XNPV computation does not use the system calendar setup in 'System Calendar. Open Period' (CRS910).

- Agreement term and life time months are always the same.

Net change ID

11559