
INSIGHTS FOR FINANCIAL INSTITUTIONS	FEBRUARY 25, 2016

CONNECT

Director of Financial Institutions
Gary Smith

888.777.2015

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FASB Releases Final Standard on Leases

This morning, the Financial Accounting Standards Board (FASB) issued its final standard on leases, Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). This standard will fundamentally change the manner in which leases are accounted for, particularly in that operating lease arrangements with a term of more than 12 months will be reflected on an entity's balance sheet as a "right of use" asset and a corresponding lease liability.

ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity) for the following entities:

Public business entities
A nonprofit entity that has issued, or is a conduit debt obligor for, securities that are traded, listed, or quoted on an exchange or over-the-counter market
An employee benefit plan that files or furnishes statements with or to the SEC.

The update will be effective for nonpublic business entities for fiscal years beginning after December 15, 2019 (i.e., January 1, 2020 for a calendar year entity), and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities.

Click here for additional information on ASU 2016-02. The update can also can be accessed on the FASB website.

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