Earlier this month, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) which would provide an additional transition option when adopting the new lease accounting standard. Under the proposed ASU, organizations would have the option to use the effective date as the date of adoption instead of at the earliest comparative period presented in the financial statements. Under this proposal, previous periods would not have to be restated and organizations would not have to apply the disclosure provisions of the new standard to periods prior to the effective date.
This option will certainly ease and simplify transition for many organizations but as the effective date for both public business entities and other entities is growing nearer, organizations should not delay any longer in assessing and planning implementation of the new lease standard.
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