Lease accounting

The FASB’s new lease accounting standard, ASU 2016-02, Leases (Topic 842), was issued on February 25, 2016. The new leasing standard presents dramatic changes to the balance sheets of lesseesLessor accounting is updated to align with certain changes in the lessee model and the new revenue recognition standard.

Our lease accounting page is your resource for implementing the new leasing guidance. Here you will find helpful information and insights on the new lease accounting rules including executive level insights through our In the loop series, and a deeper dive into the leasing standard’s overall requirements with our In depth publication. Now available: a comprehensive accounting and reporting guide on lease accounting to help you with your company’s implementation. Coming soon: industry focused In depth supplements. Visit for details on how PwC can assist with your approach to the new standard.

  • A lessee will recognize on its balance sheet the present value of lease payments as a lease liability and a right-of-use asset (based on the lease liability with certain adjustments). A lessee will classify a lease as either operating or finance based on criteria that are largely similar to those applied today, but without explicit bright lines.

  • Lessors will continue to classify leases as operating, direct financing, or sales-type. Leveraged lease accounting is eliminated, although grandfathered for existing arrangements.

  • The new guidance provides a new sale-leaseback model applicable to both lessees and lessors. If the transaction fails sale treatment, the buyer and seller will reflect it as a financing.

  • Extensive quantitative and qualitative disclosures are required to provide greater insight into revenue and expense recognized and expected to be recognized from existing contracts.

The standard is effective for US GAAP public reporting entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For private companies, the standard is effective for fiscal years beginning after December 15, 2019 and interim periods beginning the following year. Early adoption is permitted. Transition requires application of the new rules at the beginning of the earliest comparative period presented.

Listen to our podcast for an overview of the new leasing model

Need to get up to speed on the new leasing standard? This podcast will take you from zero to sixty on the new models for lessee and lessor, and how they can impact you.

In brief: Lease accounting: The long-awaited FASB standard has arrived


The FASB issued its new lease accounting standard. There are elements of the standard that could impact almost all entities to some extent, although lessees will likely see the most significant changes. Read our In brief article to learn more about the changes to lease accounting.

Energy executive series: The GAAP leasing standard for tax executives & tax legislative update webcast - September 7, 2016


In this webcast, e will present an overview of the GAAP leasing standard change and discuss the ways in which it will impact tax departments at energy companies.

2016 lease accounting survey


Finance and real estate executives share their views on the impact of the new lease accounting standards.

10Minutes on the new US lease standard


As companies begin to digest the FASB’s new lease standard, PwC provides some steps companies should take to get prepared.

In depth: Insurance industry supplement to leasing standard


This supplement to our In depth on leases highlights areas that could create challenges for insurance companies.

In depth: Technology industry supplement to leasing standard


This supplement to our In depth on leases highlights areas that could create challenges for technology companies.

Lessor accounting under the new leasing standard


Is leasing your business? The new leasing standard makes changes to the accounting that will affect the leasing landscape. Watch now to learn more.

Energy leasing: The impact of the new leasing standard on energy companies - Webcast replay


During this recorded webcast, we discuss the impact of the new leasing guidance beyond financial reporting and address some of the actions that companies can undertake to prepare for the changes in a thoughtful way.

Lessee accounting under the new leasing standard


Need to get your head around the new leasing standard? Watch this video for leasing 101, from the Lessee’s point of view.

Straight talk on leasing


Video guidance to help you get ready for the coming lease accounting change.

The quarter close: Directors edition Q2 2016


This quarterly publication is designed to keep directors informed about the latest accounting and financial reporting issues.