Fair Value of the Underlying Asset by Lessors That Are Not Manufacturers
The amendments in this Update reinstate the
exception in Topic 842 for lessors that are not manufacturers or dealers.
Specifically, those lessors will use their cost, reflecting any volume
or trade discounts that may apply, as the fair value of the underlying
asset. However, if a significant lapse of time occurs between the
acquisition of the underlying asset and lease commencement, those
lessors will be required to apply the definition of fair value (exit
price) in Topic 820.
the Statement of Cash Flows—Sales-Type and Direct Financing Leases
The amendments in this Update address the concerns
of lessors within the scope of Topic 942 about where “principal payments
received under leases” should be presented. Specifically, lessors
that are depository and lending institutions within the scope of Topic
942 will present all “principal payments received under leases” within
Related to Topic 250, Accounting Changes and Error Corrections
The amendments in this Update address those
concerns by explicitly providing an exception to the paragraph 250-10-50-3
interim disclosure requirements in the Topic 842 transition disclosure
This Accounting Standards Update is the final
version of Proposed Accounting Standards Update 2018–310—Leases (Topic 842)—Codification Improvements
for Lessors, which has been deleted.
Accounting Standards Update 2019-01
Issued: March 05, 2019