tag:blogger.com,1999:blog-7390689584378451863.post3348261182929818749..comments2023-05-08T08:09:25.972-04:00Comments on Lease Accounting blog: Today's board meeting: Setting the stageKelvin Smithhttp://www.blogger.com/profile/00766330254970012724noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7390689584378451863.post-44854889229161576752013-04-19T15:45:24.805-04:002013-04-19T15:45:24.805-04:00Under FAS 13 (the current standard), you use the c...Under FAS 13 (the current standard), you use the current index, which means no inflation changes are considered part of the minimum lease payments; everything is contingent rent. The proposed new standard calls for initial measurement based on no inflation, then recalculating the remaining rent for the lease each time the rents change due to application of the CPI adjustment (as noted in http://financialcomputer.blogspot.com/2011/07/second-exposure-draft-coming.html). Both the asset and the liability would be adjusted (though any change taking effect in the current reporting period would be expensed).Kelvin Smithhttps://www.blogger.com/profile/00766330254970012724noreply@blogger.comtag:blogger.com,1999:blog-7390689584378451863.post-26696239724683202022013-04-19T14:26:36.803-04:002013-04-19T14:26:36.803-04:00I was wondering if you could briefly clarify a few...I was wondering if you could briefly clarify a few things regarding accounting for lease payments tied to an index. If a company's lease payments are tied to the CPI and the previous years rate of inflation was 2%, are they supposed to include this 2% increase in their calculation of minimum lease payments? Or are they supposed to assume the current index across future lease payments (i.e. no inflation)? I'm curious about what current regulations stipulate and what it looks like is in store for the future. Thanks!Roberthttps://www.blogger.com/profile/13353836192241248678noreply@blogger.com