Our Blog

Lease Accounting Changes

Lease Accounting Changes


In June of 1976, the Financial Accounting Standards Board (FASB) released FAS 13 - Accounting for Leases. After years of deliberation, in the first quarter of 2016, the FASB finalized changes to the accounting rules. The new rules will increase transparency in lease accounting by bringing operating leases onto the balance sheet.
Organizations will continue to receive the benefits of leasing, including lower monthly payments, thanks to the leasing company's residual investment. The present value of operating lease obligations will still be lower than the cost of buying the equipment outright. Technology exchange options and lease-based refresh programs remain as powerful financial tools to manage assets and avoid technological obsolescence.
This is for informational purposes only. Please consult your auditor for confirmation and discuss covenants with banks and creditors. First American does not provide tax, legal or accounting advice.
Blog post currently doesn't have any comments.

Follow Us

First American Commercial Bancorp, Inc. is a wholly-owned subsidiary of City National Bank. Deposit products and services are offered by City National Bank Member FDIC. City National Bank is a subsidiary of Royal Bank of Canada. “First American Equipment Finance” is the trade name for certain equipment leasing and finance businesses of First American Commercial Bancorp, Inc. and its subsidiaries. Equipment financing transactions are provided in Canada by FA Equipment Finance, Inc. For California clients: Loans made or arranged pursuant to a California Finance Lenders Law license. All transactions are subject to credit approval. Some restrictions may apply. All trademarks are the property of their respective owners.

© 2021 First American Equipment Finance. All rights reserved.