FASB ASC 842 Package of Practical Expedients

FASB ASC 842 guidance for classifying leases calls for organizations to use a simplifying set of rules if they adopt all the rules as a package.

In brief, this package of rules allow organizations to keep the previous classifications of all leases; operating leases under FASB ASC 840 continue to be operating leases under FASB ASC 842, and capital leases under FASB ASC 840 are finance leases under FASB ASC 842. Organizations do not need to reassess initial direct costs. Also, organizations can choose by asset class whether to separate lease and non-lease components (e.g. maintenance).

If your site uses this package, be sure to set the FASB842_UsePracticalExpedients application parameter to Yes so that the Lease Classification Wizard knows to apply the practical expedients when classifying the lease.