Matthew Taccard New Lease Standards
On February 25th, 2016, FASB finally completed their new leasing standard which
established the principles to report transparent and economically neutral information about the
assets and liabilities that arise from leases. The main reason for this new standard was that
FASB did a research project about how much money was not on the books for leases which
was around 1,25 trillion dollars in one year. The wanted to change the standard so that leases
should be recognized as assets and liabilities by lessees. Another problem did arise now was
how much is this change going to cost which worried the stakeholders. How would this affect
the operational expenses for leases. The took a pole to and asked a wide range of stakeholders
to see what they could have done to fix the problem and it worked.
Now there are a good amount of differences between the new and old lease standards.
Starting off with what would be capitalized. Under the new lease standard, lease payments will
be capitalized which is like the capital lease under today’s rule. The real change would be the
amount that is capitalized. You must capitalize the lease payments which include insurance and
