The key difference between ASU 2016-02 and SFAS No.13 in accounting for leases by lessees is
A)The recognition of a right‐to‐use asset ROU)and lease liability on the statement of financial position for those leases previously classified as operating leases under SFAS No.13
B)Leases will be measured at their fair value by lessees
C)The classification of a lease as a finance by a lessee is based on a completely new set of criteria than was used in SFAS No.13.
D)There are no major differences between the two standards in accounting for leases by lessees.

Question

Quizplus · Accepted Answer

ASU 2016-02 requires lessees to recognize a right-to-use (ROU) asset and lease liability for all leases, including those previously classified as operating leases under SFAS No. 13. This is a significant change from SFAS No. 13, which only required lessees to recognize lease liabilities for capital leases. Additionally, SFAS No. 13 did not require lessees to record a ROU asset. Therefore, Option A is the correct choice. Option B is incorrect because ASU 2016-02 does not require leases to be measured at their fair value by lessees. Option C is incorrect because the criteria for classifying a lease as a finance lease by a lessee has not significantly changed, and is still based on the criteria outlined in SFAS No. 13. Option D is incorrect because, as noted above, there are significant differences between the two standards in accounting for leases by lessees.

The Key Difference Between ASU 2016-02 and SFAS No