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.
© 2016 - 2019 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.