ASU 2018-01 — Leases (Topic 842)—Land Easement Practical Expedient for Transition to Topic 842

A number of stakeholders inquired about the application of Topic 842 to land easements. Land easements (also commonly referred to as rights of way) represent the right to use, access, or cross another entity's land for a specified purpose. There currently is diversity in practice in accounting for land easements.

The amendments in this Update provide an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under Topic 840, Leases. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date that the entity adopts Topic 842. An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease.

This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2017-290—Leases (Topic 842)—Land Easement Practical Expedient for Transition to Topic 842, which has been deleted.

Issued: January 25, 2018