• Plans to amend FASB 13
• But not expected to act until 2009
• FASB press release 7.19.06
• CFO article

• Amortization of leasehold improvements

• To amortize leasehold improvements over a term that includes lease renewals, renewals must be "reasonably assured", per FASB 13

• Rent holidays
• Landlord / Tenant incentives
• Letter also discusses general disclosure requirements, including for MD&A; see Disclosure Requirements below

• Mainly restaurant chains
• Some other companies, with lesser exposure, have had to change their practices, and take a cumulative charge, but avoided restatement
• Lease extension periods were improperly included in determining the length of time to amortize leasehold improvements
• Result was to delay GAAP recognition of these expenses
• Didn't affect amounts or timing of cash items

CKE Restaurants Restaurant chain

Jack in the Box Restaurant chain

Darden Restaurants Restaurant chain

Brinker International Restaurant chain

Ruby Tuesday Restaurant chain

Krispy Kreme Doughnuts Fast food chain

Rubio's Restaurants Restaurant chain

McDonald's Fast food chain

Pep Boys Auto maintenance chain

Yum! Brands Fast food chain

Target Retailer

Applebee's International Restaurant chain

Borders Bookstore chain

Sears Roebuck Retail

Kohl's Retail

Cingular Wireless Telecom

SEC_CODE_REF_0090001192884

CVS Retail

• Notes to the financial statements
• Critical accounting policies (MD&A), if appropriate
• MD&A, if known likely trends or uncertainties in future rent or amortization expense could materially affect operating results or cash flows

• Material lease agreements or arrangements
• Essential provisions of material leases, Including the original term, renewal periods, reasonably assured rent escalations, rent holidays, contingent rent, rent concessions, leasehold improvement incentives, and unusual provisions or conditions
• Accounting policies for leases, including the treatment of each of the above components of lease agreements
• Basis on which contingent rental payments are determined with specificity, not generality
• Amortization period of material leasehold improvements made either at the inception of the lease or during the lease term, and how the amortization period relates to the initial lease term

• Topic C.1  Accounting
• Topic C.2  Disclosure
• Topic II.E.1  Accounting
• Topic II.E.2  Disclosure

• Topic II.E.1  Accounting
• Topic II.E.2  Disclosure

• Loss on a Sublease
• Interprets FASB 13 and APB 30
• FASB summary
• FASB status

• Purchase of a Leased Asset by the Lessee
  during the Term of the Lease
• Interprets FASB 13
• FASB summary
• FASB status

• Leases Involving Only Part of a Building
• Interprets FASB 13
• FASB summary
• FASB status

• Leases of Government Property
• Interprets FASB 13
• FASB summary
• FASB status

• Leases in a Business Combination
• Interprets FASB 13
• FASB summary
• FASB status

• Lessee Guarantee of the Residual Value
  of Leased Property
• Interprets FASB 13
• FASB summary
• FASB status