Post-Implementation Review of Topic 842: Leases
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Introduction
Purpose of this Survey
The objective of the Post-Implementation Review process is to determine whether a standard is accomplishing its stated purpose, to evaluate the standard's implementation and continuing compliance costs and related benefits, and to provide feedback to improve the standard-setting process. Feedback from preparers on implementation and the ongoing application of new standards is critical to the FASB’s efforts to improve financial reporting in the most cost-effective manner.
Topic 842, Leases, became effective for private companies and most not-for-profit organizations (referred to as nonpublic entities) for annual reporting periods beginning after December 15, 2021. All references to the “new standard” in this survey refer to Topic 842, including amendments responding to private company stakeholder concerns, such as related party arrangements between entities under common control. Because adoption of the new standard has concluded for private entities and subsequent application is ongoing, the FASB seeks to understand preparers’ experiences implementing and subsequently applying the new standard.
Objective of Topic 842, Leases
The objective of the new standard was to provide users of financial statements with a more faithful representation of an entity’s rights and obligations by recognizing lease assets (right-of-use assets) and lease liabilities for all leases on the balance sheet of lessees and disclosing key information about lease transactions. In addition, the legacy lessor accounting model was largely retained but certain aspects were amended to more closely align lessor accounting for with the comparable guidance in Topic 606, Revenue from Contracts with Customers, and Topic 610, Other Income. In addition, the new standard requires new disclosures about a lessors’ risk management activities associated with the residual value of the assets it leases to customers.
Survey Instructions
To collect feedback from nonpublic entity preparers, the FASB created the following survey that asks about implementation and ongoing activities related to applying Topic 842. Survey questions cover the following topics:
The objective of the Post-Implementation Review process is to determine whether a standard is accomplishing its stated purpose, to evaluate the standard's implementation and continuing compliance costs and related benefits, and to provide feedback to improve the standard-setting process. Feedback from preparers on implementation and the ongoing application of new standards is critical to the FASB’s efforts to improve financial reporting in the most cost-effective manner.
Topic 842, Leases, became effective for private companies and most not-for-profit organizations (referred to as nonpublic entities) for annual reporting periods beginning after December 15, 2021. All references to the “new standard” in this survey refer to Topic 842, including amendments responding to private company stakeholder concerns, such as related party arrangements between entities under common control. Because adoption of the new standard has concluded for private entities and subsequent application is ongoing, the FASB seeks to understand preparers’ experiences implementing and subsequently applying the new standard.
Objective of Topic 842, Leases
The objective of the new standard was to provide users of financial statements with a more faithful representation of an entity’s rights and obligations by recognizing lease assets (right-of-use assets) and lease liabilities for all leases on the balance sheet of lessees and disclosing key information about lease transactions. In addition, the legacy lessor accounting model was largely retained but certain aspects were amended to more closely align lessor accounting for with the comparable guidance in Topic 606, Revenue from Contracts with Customers, and Topic 610, Other Income. In addition, the new standard requires new disclosures about a lessors’ risk management activities associated with the residual value of the assets it leases to customers.
Survey Instructions
To collect feedback from nonpublic entity preparers, the FASB created the following survey that asks about implementation and ongoing activities related to applying Topic 842. Survey questions cover the following topics:
- Accounting Personnel (employees or external personnel)
- Departments Other Than Accounting and IT (e.g., Human Resources, Legal, Tax)
- IT Systems
- Preparation Costs
- Audit Costs
- Investor/Lender Education
- Practical Expedients
Most of the questions approach the implementation and ongoing application of Topic 842 from the perspective of a lessee. However, you may also respond from the perspective of a lessor, or both a lessee or a lessor, as applicable.
The complete list of questions is available for download. We anticipate that the survey will take approximately 40 minutes to complete. You may pause and complete your survey at a later session provided you are using the same computer and browser.
If you are not a preparer of financial statements and received this survey by mistake, please do not complete the survey. If you have completed the survey already, please do not complete the survey again.
The complete list of questions is available for download. We anticipate that the survey will take approximately 40 minutes to complete. You may pause and complete your survey at a later session provided you are using the same computer and browser.
If you are not a preparer of financial statements and received this survey by mistake, please do not complete the survey. If you have completed the survey already, please do not complete the survey again.