Lease accounting transition: Index or rate for measuring operating lease liability

In depth , PwC US Aug 30, 2018

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SEC staff provides guidance on measuring the lease liability for operating leases when transitioning to new standard.

Overview

When implementing the new leases standard (ASC 842), a question has arisen regarding the appropriate index or rate a lessee should use for a variable lease payment when measuring the lease liability of an operating lease in transition.

The SEC staff recently concluded that a company may use the current index or rate. However, if this represents a change from what has been done for footnote disclosure purposes for operating leases under the prior leases guidance, it would be considered a change in accounting policy and may require preferability.

To have a deeper discussion about lease accounting, contact:

Scott Tornberg

Partner, National Professional Services Group, PwC US

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Ashima Jain

Managing Director, National Professional Services Group, PwC US

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David Schmid
IFRS & US Standard Setting Leader, National Professional Services Group, PwC US
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