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Lease Management & Lease Accounting Blog

Lease Accounting

The Top 10 Common ASC 842 Lease Accounting Mistakes to Avoid

Here are some common mistakes lessees make when dealing with lease accounting according to the ASC 842 standards and how iLeasePro can easily help you avoid making them. 1. Lease Misclassification: Under ASC 842, leases should be classified as either operating or finance leases. Misclassifying a lease can significantly impact a company’s financial statements. 2….

ASC 842 Lease Accounting: A Scenario Explained

The ASC 842 Lease Accounting Standard was introduced by the Financial Accounting Standards Board (FASB) to establish new guidelines for lease accounting. Understanding how to build an ASC 842 Lease Accounting amortization schedule and record ASC 842 Lease Accounting journal entries is crucial for accurately reporting lease transactions. In this blog, we will walk through…

ASC 842 Audit: Guide to Compliance Evaluation

When an auditor evaluates a company’s implementation of ASC 842 lease accounting, they generally follow a series of steps to ensure compliance when performing a lease accounting audit. These steps may vary slightly depending on the specific circumstances of the company and the auditor’s approach. However, a general process is as follows: Understand the entity’s…

ASC 842: Applying the Right Lease Classification

The ASC 842, or Accounting Standards Codification Topic 842, is the accounting standard for lease accounting in the United States. It was issued by the Financial Accounting Standards Board (FASB) to improve transparency and comparability of financial statements by recognizing lease assets and liabilities on the balance sheet. Under ASC 842 lease classification, leases are…

Top 10 Lease Accounting Internal Controls for Success

Implementing new processes and internal controls is crucial for ensuring accurate and timely lease accounting under the new standards. Here are some key processes and controls to consider: Lease identification and inventory: Establish a process to identify and track all lease agreements, including embedded leases within service contracts or other arrangements. Maintain a comprehensive lease…

Increasing Revenue Growth: CPA Firms and ASC 842 Lease Solutions

CPA firms can increase their Monthly Recurring Revenue (MRR) by providing ASC 842 Lease Accounting solutions for private company clients. By offering expert guidance and services related to the implementation and ongoing management of ASC 842, CPA firms can create new revenue streams and foster long-term client relationships. Here are some strategies for CPA firms…

Navigating the Challenges of Implementing AI in Lease Accounting

While AI offers numerous benefits for lease accounting, there are also potential risks and challenges that organizations should consider when implementing AI-driven solutions. Some of the risks associated with using AI in lease accounting include: Data privacy and security: AI systems require large amounts of data to function effectively. Ensuring the privacy and security of…

Revolutionizing Lease Accounting: AI's Impact

AI will likely have a significant impact on lease accounting in several ways, as it has the potential to enhance efficiency, accuracy, and compliance. Some possible effects of AI on lease accounting include: Automation of data entry and analysis: AI can process large volumes of lease agreements and extract relevant data points, such as lease…

8 Risks of Using Spreadsheets for ASC 842 Lease Accounting

While spreadsheets are widely used for various tasks in accounting, they may not be the ideal tool for complying with the ASC 842 lease accounting standard. Checkout our video on this topic. The ASC 842 standard, which was introduced by the Financial Accounting Standards Board (FASB), aims to increase transparency and comparability of financial statements…

Top 5 Ways to Streamline Workflows with Lease Accounting

A lease accounting solution can help minimize workflow in several ways: Automated data entry: A lease accounting solution can automate data entry by importing data directly from lease contracts, eliminating the need for manual data entry and reducing the potential for errors. Centralized lease management: With a lease accounting solution, all lease information can be…

The Impact of Non-Compliance with ASC 842 Lease Accounting

Non-compliance with the ASC 842 lease accounting standard can have several negative impacts on a company, including the following: Financial statement misrepresentation: Failure to comply with ASC 842 may result in inaccurate representation of a company’s financial position. The balance sheet might not properly reflect the company’s lease liabilities and right-of-use assets, leading to misleading…

ASC 842: Understanding the Relevant Borrowing Rate

The Accounting Standards Codification (ASC) 842 provides guidelines for lease accounting in the United States. One of the key components of ASC 842 is the determination of the lease liability and lease asset, which is based on the present value of lease payments using the relevant borrowing rate. In this blog, we will discuss the…

Introduction to Lease Accounting: A Complete Overview

Lease accounting is a critical aspect of financial reporting that helps companies manage their leases effectively. It is a method of accounting for the rights and obligations associated with the use of leased assets. Lease accounting is an important topic for businesses, as it can have a significant impact on financial statements and other reporting…

ASC 842: Managing Future CPI Increases in Accounting

When the future CPI rates are not known, ASC 842 requires lessees to estimate the future CPI rates to account for the CPI increase in rent. The estimate should be based on the best available information, such as historical CPI trends or forecasts provided by credible sources. To account for the CPI increase in rent…

ASC 842: When to Modify a Lease Agreement

Lease modifications can have a significant impact on lease terms, lease payments, and lease liability. With the implementation of the ASC 842 accounting standard, it is important for companies to understand how lease modifications are accounted for to ensure compliance with the new guidelines. In this blog, we will discuss how lease modifications are accounted…

Simplified Accounting for Acquisitions: ASC 842

Accounting for an acquisition under the ASC 842 Lease Accounting Standard involves several steps, including identifying and evaluating the leases associated with the acquisition, and determining the appropriate accounting treatment for those leases. First, the acquirer must identify all leases that are associated with the acquired entity, including both operating and finance leases. This includes…

How FASB ASC 842 Transformed Lease Accounting

The FASB Accounting Standards Update (ASU) for topic ASC 842, Lease Accounting, became effective at the end of 2021 for all reporting periods after December 15, 2021. This standard introduced significant changes across various industries. With the standard now in effect, public and private companies had to ensure compliance with the new accounting guidelines. The…

The Impact of ASC 842 Lease Accounting on the Hospitality Industry

The ASC 842 Impact to the Hospitality Industry whitepaper dives into the details and offers an example of what one might consider a typical situation may the best way to demonstrate the effect on the financial statements of the provisions in ASC 842 versus current GAAP accounting requirements.



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