Why Did The FASB Issue a New Standard on Leases?

In 2016, the FASB and the International Accounting Standards Board (IASB) embarked on a joint project to improve the financial reporting of leasing activities. The new guidance responds to requests from investors and other financial statement users for a more faithful representation of an organization’s leasing activities.  The end goal was to provide more consistency and transparency in how property, equipment and fleet leases get accounted for on the balance sheet.