Below are some examples of SAB 74 disclosures for the new lease accounting standard that do a good job of giving important quantitative and qualitative information about the status of these companies’ implementation projects.
Quarter Ended February 28, 2018
What They Do Well: FedEx states a significant amount of information about their progress implementing the new standards, including the estimated material impact to the balance sheet, and that they are focusing on data collection, implementing a lease management system, and establishing processes and controls.
Quarter Ended: March 31, 2018
What They Do Well: Apple discloses the quantitative estimate of the impact to the balance sheet – $9 billion, and states that there will be no impact to the consolidated statement of operations. Apple also discloses that they cannot determine what the impact will actually be at this time.
Quarter Ended: February 3, 2018
What They Do Well: Target specifies that they will elect both the package of practical expedients available as well as the land easements and hindsight expedient. They also discuss the effect some of these practical expedients will have on reporting and on the balance sheet.
Quarter Ended: February 10, 2018
What They Do Well: Autozone gives a detailed update on their implementation progress, even though the evaluation has not been completed. They discuss the establishment of a cross-functional implementation team as well as the ongoing analysis of the material impact to the balance sheet and changes to processes, systems, and controls.
Quarter Ended: December 31, 2017
What They Do Well: New York Community Bancorp discusses some of the practical expedients they are considering applying and states some of the different disciplines represented on the project team.
Quarter Ended: March 31, 2018
What They Do Well: Valero Energy specifies the steps they are taking to implement a lease accounting system, including integrating it with their general ledger and making modifications to other processes related to the system.
While other companies have stated their intention to early adopt, so far these are the only companies that have confirmed early adoption.
Microsoft adopted the new lease accounting standard on July 1, 2017 at the same time they adopted the revenue recognition standard. They elected all available practical expedients and implemented controls and system functionality to enable them to comply with the new standard.Visit Filing: See Page 12
Sunrun adopted the new lease accounting standard on January 1, 2018 at the same time they adopted the revenue recognition standard. They used the modified retrospective method at the beginning of the earliest comparative period in their financial statements and restated each prior reporting period.Visit Filing: See Page 11
Target adopted the new lease accounting standard on February 4, 2018 at the same time they adopted the revenue recognition and pensions standards. They elected the package of practical expedients, but did not elect the hindsight practical expedient. The adoption of the standard resulted in an increase in $1.3 billion in lease assets and $1.4 billion in lease liabilities to Target’s balance sheet.Visit Filing: See Page 2