This is a very good analysis of the new lease standard. I have posted a couple paragraphs from the intro, but I recommend downloading the entire link to the pdf here.

Accounting for Leases Under the New Standard, Part 1

By  Robert Singer, PhD, CPA, Alyssa Pfaff, Heather Winiarski and Mark Winiarski, CPA

Analysis, Featured, August 2017 Issue, Trending | August 2017

The new lease accounting standard, released by FASB in early 2016, represents one of the largest and most impactful reporting changes to accounting principles in decades. The standard itself is voluminous, and digesting it will be a major task for companies, auditors, and accountants. In part 1 of a two-part series, the authors discuss the changes to the definition and classification of different types of leases and detail the accounting process for lessees.

In Feb. 25, 2016, FASB published a new lease standard that represents a complete overhaul of financial reporting in this area. The new standard becomes effective for public business entities, certain not-for-profits, and certain employee benefit plans for annual periods (including interim periods) beginning after Dec. 15, 2018, and for all other entities, annual periods beginning after Dec. 15, 2019. The standard provides a long transition period; however, it requires entities to follow a modified retrospective approach, under which the required changes would apply to leases existing at the beginning of the earliest comparative period presented in the financial statements of the year the new standard is adopted. For example, a calendar-year public company presenting three comparative years would retrospectively apply the guidance to its income statement ending Dec. 31, 2017. The modified retrospective approach would not require any transition accounting for leases that have expired prior to the earliest period presented.

The new rules require ongoing evaluation of leases to determine when an event occurs that may change the recognition or measurement of the lease, such as a change in the lease term or a modification to an existing agreement. In some instances, these changes will oblige an entity to distinguish between changes that are in essence modifications of an existing lease and those that constitute a new lease arrangement requiring separate accounting. Among the more challenging aspects of the new standard are requirements that the parties separate lease components within a contract, and identify and segregate non-lease components. The standard is replete with examples of how the parties might make such determinations.