Tag: Disclosure

Restaurant Nutrition Labeling Provisions of the Patient Protection and Affordable Care Act of 2010

More than two-thirds of adults in the U.S. are overweight or obese.  Approximately one-third of consumers’ total caloric intake comes from foods consumed outside the home in restaurants and other retail food businesses.  In order to provide consumers with easily accessible nutrition information, pursuant to the nutrition labeling provisions of the Patient Protection and Affordable Care Act of 2010, the Food and Drug Administration (FDA) now requires the disclosure of certain nutrition information for standard menu items in restaurants.

FDA is now requiring disclosure of certain nutrition information for standard menu items in restaurants and similar retail food establishments that are part of a chain with 20 or more locations doing business under the same name and offering for sale substantially the same menu items.  These businesses will be required to provide calorie and other nutrition information for standard menu items, including food on display and self-service food.  This rule was originally to become effective on December 1, 2015, but the compliance date for the rule was extended to May 5, 2017.

To be covered by this rule, a business must satisfy several criteria.  Primarily, it must be a restaurant or similar retail food establishment.  Restaurants and similar retail food establishments include bakeries, cafeterias, coffee shops, food service facilities located within entertainment venues (such as amusement parks, bowling alleys, and movie theaters), food service vendors such as ice cream shops and mall cookie counters, food take-out and/or delivery establishments, such as pizza take-out and delivery businesses, quick service restaurants, and table service restaurants.

These new rules will require food service operators to revamp their menus, but presumably these changes will lead to healthier public.

For further information regarding this topic, please contact:

Jonathan M. Weis at:

jweis@lgattorneys.com or 312-368-0100.

The Wait is Over: New Standards Adopted on Reporting of Leases on Financial Statements


On February 26, 2016, the Financial Accounting Standards Board (“FASB”) adopted a set of long-awaited standards regarding the method of reporting of leases on financial statements.  The new FASB standard addresses a long-standing criticism of the current standard which permits most operating leases to go unreported on a tenant’s balance sheet.  Under the new standard, a tenant will be required to report leases with lease terms in excess of twelve (12) months as both assets and liabilities.  The purpose of FASB’s adoption of this standard is to provide disclosure of financial transactions that have a significant impact on the financial condition of a company.  The accounting treatment for operating leases will more closely approximate the accounting treatment for capital lease transactions, i.e., those leases which are considered a financing device.

Under the new standard, the tenant under an operating lease will report the lease as a liability which will be equal to the present value of all future lease payments.  It will also report the lease as an asset based upon a right of use (“ROU”).  A value of a ROU asset is determined by adding initial direct costs of entering into the lease and any prepaid lease payments to the lease liability amount and then subtracting any lease incentives (e.g., rent abatement) received by the tenant.  The ROU asset is then depreciated over the term of the lease.  The new standard further refines the rules regarding the recognition of fixed payments associated with payment of the landlord’s ownership expenses (i.e., real estate taxes and insurance).  These payments will now be considered a part of the lease expense and will accordingly increase both the reported liability and the value of the ROU asset.

The full impact of the new standard will be determined over time.  While the standard will result in more complete disclosure of future lease obligations, the application of the standard to a company’s balance sheet will reflect both an increase in assets and liabilities and will make year-to-year comparisons more difficult.  Furthermore, the impact on pre-standard loan covenants and other contractual rights and obligations determined on the basis of a company’s balance sheet will need to be carefully evaluated in light of the changes in the accounting standard.

The new standards provide for a lengthy phase in period.  Public entities will need to start reporting leases under the new standards for fiscal years beginning after December 15, 2018 and privately held entities will need to begin applying the new standard for fiscal years beginning after December 15, 2019.

For further information regarding the new accounting standards, real estate leasing matters and related issues, please contact:

Morris R. Saunders at:

msaunders@lgattorneys.com or 312-368-0100


Jeffrey M. Galkin at:

jgalkin@lgattorneys.com or 312-368-0100.


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