The FASB has issued ASU 2021-09 - Leases (Topic 842): Discount Rate for Lessees That Are Not Public Business Entities. This ASU is in response to implementation concerns brought to the attention of the FASB regarding the costs and complexities of applying the standard.

Under ASU 2021-09, a lessee may now make an accounting policy election by each underlying asset class to use a risk-free rate discount for lease measurement instead of the lessee’s incremental borrowing rate. As previously issued, ASC 842 only permitted this policy election to be made on an entity-wide basis rather than by underlying asset class. ASU 2021-09 also clarifies that for any lease where an implicit rate in the lease is readily determinable, this implicit rate must be used.

The amendments in the ASU are to be implemented concurrently with Topic 842, if not already adopted, which is effective for non-public entities for annual periods beginning after December 15, 2021. Entities that have already adopted Topic 842 are to apply ASU 2021-09 on a modified retrospective basis effective for annual periods beginning after December 15, 2021.

The full text of ASU 2021-09 is available here. 

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