Lease Accounting and the New Revenue Standard

PwC just came out with a great overview of how the new leasing standard will interact with ASC 606.

The biggest changes from current GAAP come from 1) variable consideration and 2) sale and leaseback transactions.  And these changes not only affect lessors, but lessees as well.  Accordingly, we expect see our clients renegotiating lease terms going forward...

Lessors may want to restructure variable leases to fixed terms, as fixed lease payments can now be recognized up front.  Conversely, lessees may prefer variable terms as it can potentially limit their reported liabilities on their balance sheets.

Thoughts?  Questions?  Send us a note and we'll get back to you.