FASB Modifies Risk-Free Discount Rate Practical Expedient for Lessees That Are Not Public Business Entities

November 2021

The FASB issued ASU 2021-09 (“Update”) to amend the level at which private company lessees can elect the riskfree rate accounting as a practical expedient. Under the new standard, lessees can make this election by asset class rather than the current “all-or-nothing” approach for all leases. The Update is available here and has different effective dates depending on whether a company already adopted ASC 8422.