Within the required retrospective transition method for the new lease accounting standard is a very familiar question:
Will we be required to revise all five years of the selected financial data presented in Item 6 of Form 10-K?
As you may already know the SEC formally granted relief in the five-year summary for companies that use a full retrospective implementation for the new revenue recognition standard. For leases, they have done exactly the same.
At the March SEC Regulations Committee meeting of the CAQ this issue was addressed and if you read the minutes of the meeting you will see the SEC Staff’s announcement that:
“The selected financial data table should follow the transition provisions of the ASU (i.e., the new leasing standard should be applied as of the beginning of the earliest comparative period presented in the financial statements).”
Thank you letters may be appropriate!
As always, your thoughts and comments are appreciated!