FASB ASC 842

In the February 2016 Accounting Standards Update (ASU 2016-02), the United States Financial Accounting Standards Board (FASB) provided new guidelines for capitalizing leases. These guidelines are documented in Accounting Standards Codification, Leases (Topic 842). "FASB ASC 842" refers to the guidelines and procedures outlined in Topic 842.

In general, FASB ASC 842 requires that previously unrecorded off-balance sheet obligations be brought more prominently to light by presenting lease liabilities on the face of the balance sheet.

The FASB ASC 842 guidelines have these goals:

• eliminate off-balance sheet financing
• improve comparability
• better reflect the financial position of lessee
• provide fewer opportunities to structure finances to obtain a certain reporting outcome
• address practice issues for preparers

See also:

• finance lease
• operating lease
• IASB IFRS 16