The new lease standard presents sweeping changes in the way we think about and record leases in our financial statements. Previous blog posts have discussed elements of the new standards specifically. Understanding the impact of the new standards is essential, but determining a game plan will make the implementation process go much more smoothly.
FASB ASC 842, Leases, otherwise known as the new lease standard, requires many changes in how we account for leases. The biggest impacts of the new standard will be (a) felt on the balance sheet as substantially all operating leases will now be recognized as right-of-use assets and lease liabilities and (b) reflected by new qualitative and quantitative disclosures.
The new lease standard has revolutionized the way we report operating leases. By definition under the new lease standard, an operating lease is “an agreement that has an identified asset and a right to control the identified asset over a period of time, where the agreement does not otherwise meet the finance lease criteria.” We are used to accounting for these leases sole Read More >>
The new lease standard has introduced new terminology. What we have become used to calling “capital leases” will become “finance leases” with the implementation of FASB ASC 842. While balance sheet reporting and income statement expense recognition will remain substantially the same for finance leases, the FASB has introduced new terminology with the new lease stan Read More >>
In its review of SEC registrants, the Financial Accounting Standards Board (FASB) noted that publicly-held companies disclosed over $1 trillion of off-balance sheet leases. Per the current lease accounting rules, only those leases meeting the capital lease criteria are reported on the balance sheet, while many leases are s Read More >>
Business entities and not-for-profit organizations that report their financial statements in accordance with the U.S. generally accepted accounting principles (GAAP) are subject to the accounting standards codification (ASC) promulgated by the Financial Accounting Standards Board (FASB). When the FASB changes U.S. GAAP, it issues Accounting Standards Upda Read More >>
