Leases Standard: Option to keep CAM as part of Lease Revenue

If you have been struggling over how to comply with FASB's new leases standard requiring non-lease revenue (like CAM) to be accounted for separately from lease revenue, you will be pleased with the latest news. 

FASB met on March 28, 2018 to discuss industry comment letters to its proposed new leases standard and elected to provide a practical expedient that will allow most real estate lessors to avoid separately reporting common area maintenance (CAM) revenue from lease revenue as they adopt the new lease standards.

Under Topic 842 Leases, companies are to separate the portion of rents covering CAM reimbursement from base lease revenue.  In doing so, pure lease revenue would be reported in accordance with the new leases standard while all non-lease components would be reported in accordance with Topic 606 Revenue from Contracts with Customers.

More info to come as we evaluate the practical expedients.