The Financial Accounting Standards Board (FASB) is a private, independent organization responsible for establishing and improving financial accounting and reporting standards in the United States. One significant area of focus for FASB is lease accounting.
In 2016, FASB introduced the new Accounting Standards Update (ASU) No. 2016-02, commonly known as ASC 842, to overhaul lease accounting and increase transparency. The new standard requires lessees to recognize lease liabilities and right-of-use assets on their balance sheets for most leases, including operating leases. This change aims to provide a more accurate representation of a company's financial position by reflecting the long-term lease commitments.
For more, visit www.fasb.org