FASAB issues statement to clarify lease terms

April 7, 2023

The Federal Accounting Standards Advisory Board (FASAB) on Friday issued Statement of Federal Financial Accounting Standards (SFFAS) 61, Omnibus Amendments 2023, Leases-Related Topics II.

The statement is intended to provide targeted technical clarifications to further facilitate implementation of SFFAS 54, Leases. The omnibus amendments clarify:

1. The treatment of purchase options and defaults on payments for purposes of (1) determining the lease term and (2) assessing contracts or agreements that transfer ownership for options to terminate;
2. The discounting of lease liabilities and receivables; and
3. The applicability of sale-leasebacks requirements under paragraphs 89–92 to intragovernmental sale-leasebacks and the applicable disclosure.

The amended SFFAS 54 becomes effective for reporting periods beginning after Sept. 30, 2023, according to a news release.

[Journal of Accountancy]