Diseño centrado en el usuario

In contrast to its approach to developing a new lessee model, the FASB decided to make only minor modifications to the current lessor model. Under the new standard, a lessor would classify the lease as a sales-type lease, direct financing lease, or operating lease by using the classification criteria previously discussed for lessees:

• Sales-type lease — A lease in which the lessee effectively gains control of the underlying asset during the lease term. The lessor would derecognize the underlying asset and recognize a lease receivable and unguaranteed residual asset. Any resulting selling profit or loss would be recognized at lease commencement. Initial direct costs would be recognized as an expense at lease commencement unless there is no selling profit or loss. In this case, the initial direct costs would be deferred and recognized over the lease term. In addition, the lessor would recognize interest income from the lease over the lease term.

• Direct financing lease — A lease in which the lessee does not effectively obtain control of the asset but (1) the present value of the lease payments and any residual value guarantee (which could be provided entirely by a third party or could comprise a lessee guarantee coupled with a third-party guarantee)5 _{represents substantially all of the}

fair value of the underlying asset and (2) it is probable that the lessor would collect the lease payments and any amounts related to the residual value guarantee. The lessor would derecognize the underlying asset and recognize a lease receivable and unguaranteed residual asset. The lessor’s profit, initial direct costs, and interest income would be deferred and amortized into income over the lease term.

• Operating lease — A lease in which the lessee does not effectively obtain control of the asset over the lease term because none of the classification criteria are met. Income resulting from an operating lease would be recognized on a straight-line basis unless another systematic basis would be more appropriate. Any initial direct costs (i.e., those that are incremental to the arrangement and would not have been incurred if the lease had not been obtained) are to be deferred and expensed over the lease term in a manner consistent with the way lease income is recognized.

5 _{If the present value of lease payments plus a lessee-provided residual value guarantee represents substantially all of the fair value of the underlying asset, the lessor would}

Section 5 — Overview of the New Leases Model: Key Provisions 73

Thinking It Through

While the FASB aligned lessor accounting with the new revenue guidance in ASC 606 in many respects, there is an important distinction that may affect lessors operating in the O&G sector. Under ASC 606, variable revenues are estimated and included in the transaction price, subject to a constraint. In contrast, under the new leases standard, variable lease payments would generally be excluded from the determination of a lessor’s lease receivable. It is unclear whether the new standard will include guidance on accounting for arrangements that have a significant “variable-only” payment stream. There is a possibility that direct financing leases or sales-type leases may result in inception losses for the lessor if the lease receivable plus the unguaranteed residual asset is less than the net carrying value of the asset being leased. O&G entities should evaluate the final ASU once issued to see how the final provisions may affect these types of arrangements.

Effective Date and Transition

The new guidance would be effective for public business entities for annual periods beginning after December 15, 2018 (i.e., calendar periods beginning on January 1, 2019), and interim periods therein. For all other entities, the standard would be effective for annual periods beginning after December 15, 2019 (i.e., calendar periods beginning on January 1, 2020), and interim periods thereafter. Early adoption would be permitted for all entities. Entities would be required to apply a modified retrospective method of adoption, and the FASB has proposed several forms of transition relief that should significantly ease the burden of adoption.

Thinking It Through

Under U.S. GAAP, entities may adopt the new leases standard before they adopt the new revenue guidance (even though the new revenue standard has an earlier required effective date). It is our understanding that those early adopters would be expected to apply the relevant guidance in the new revenue guidance to the extent that it affects their lease accounting. All other aspects of the new revenue standard would wait until full adoption of that standard.

Next Steps

The FASB is expected to issue its final ASU introducing the new leases model (to be codified as ASC 842) in February 2016. The IASB issued its final leases standard, IFRS 16, on January 13, 2016. For more information about IFRS 16, see Deloitte Touche Tohmatsu Limited’s January 13, 2016, IFRS in Focus. Keep an eye out for our Heads Up publication on leases that will be issued shortly after the issuance of the FASB’s final standard.

Section 6 — SEC Update: Key Provisions 74

Section 6

SEC Update

Section 6 — SEC Update: Activities Related to Requirements Under the Dodd-Frank Act 75

Activities Related to Requirements Under the