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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.
Transitioning Equipment Leases to the ASC 842 Standard
If you’re a business owner or a professional responsible for managing commercial equipment leases, you understand the complexities and challenges that come with lease management. Handling multiple leases, various lease types, and ensuring compliance with new lease accounting standards can be overwhelming. While you may not have the time to become a leasing expert, you…
Tax Implications of ASC 842 Lease Accounting Standards
The FASB ASC 842 Lease Accounting changes, which became effective at the end of 2021 for all reporting periods after December 15th 2021, haven’t just changed how leases are handled in books, but also the tax implications that may come along with it. Read more to understand the potential areas to focus in on..
iLeaseXpress Honored in Accounting Today's 2022 Top Products
We are thrilled to announce that iLeaseXpress, the cloud-based lease accounting solution from iLease Management LLC, has been recognized with an Honorable Mention in the Lease Accounting Tools category as part of the prestigious 2022 Top Accounting Products by Accounting Today. This accolade is a testament to our commitment to providing top-notch solutions to companies…
What CPA Firm Clients Can Expect From Software Implementation
Understand ASC 842: The first step, which is the most challenging, is understanding the requirements of ASC 842. It is a radical departure from past practice. Clients must grasp changes in the definition of a lease, lease payments, initial direct costs, lease term, discount rates, and allocation of consideration to lease and non-lease components. Lease…
Which Businesses May Not Benefit from Lease Accounting Software?
While lease accounting software can be highly beneficial for many businesses, there are some types of businesses that might not be good candidates for this software. These include: Sole proprietorships or very small businesses: Businesses with a single owner-operator and minimal or no employees may not have enough leasing activities to justify the cost of…
Which Businesses Benefit Most from Lease Accounting Software?
A company with more than ten active leases must consider a lease accounting solution. The new accounting standard requires more sophisticated financial calculations and detailed monitoring and tracking of leases. Companies will find it extremely challenging to use spreadsheets for lease accounting because of the following limitations of spreadsheets: Lack of ability to track changes: One cannot track changes in spreadsheets. Employees can deliberately or inadvertently overwrite spreadsheet data. Therefore, spreadsheets do not meet internal…
Meet iLeaseXpress: The Affordable ASC 842 Compliance Solution
Navigating the complexities of the ASC 842 lease accounting standard can be a daunting task, especially for private companies with smaller lease portfolios. That’s where iLeaseXpress comes to the rescue, offering a user-friendly, cloud-based lease accounting solution designed specifically for these organizations. Tailored for Private Companies: iLeaseXpress is tailored to meet the needs of…
Transitioning Clients to the ASC 842 Lease Accounting Standard
Lease accounting has indeed undergone significant changes with the implementation of ASC 842 Lease Accounting Standard, and it is essential for accountants, business owners, and professionals involved in financial reporting to understand and adapt to these changes. The ASC 842 standard was introduced to improve financial transparency and ensure that leases are appropriately reflected on…
ASC 842 Changes: Effective Dates and Transition Strategies
FASB has offered several reliefs to organizations transitioning, which also includes shift of transition dates from December 31st, 2019 to December 31st, 2021. In this article, we will take a closer look at those effective dates and the transition approaches companies have at their disposal.
Summary of Lease Discussions from the 12/2 FASB Meeting
TENTATIVE BOARD DECISIONSTentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.December 2, 2020 FASB Board MeetingPost-implementation Review:Accounting Standards Update No. 2016-02, Leases (Topic 842). The Board discussed feedback received to date during the post-implementation review (PIR) of Update 2016-02….
Impairment of Leased Assets and Right-of-Use Assets Explained
The recent changes in ASC 842 along with the Coronavirus pandemic have come together to unleash a plethora of chances in how leased assets are treated – not just for the lessee but for the lessor as well. One significant impact of the two happenings is that leases need to be recorded as a liability and a…
How COVID-19 Impacts Lease Accounting Under ASC 842
As the world continues to grapple with an invisible enemy, our daily lives aren’t all that have been impacted. Companies as a whole have been unable to collect or pay rent on their leased assets, while the changes in ASC 842 have meant that lease accountants all over the globe following GAAP have had to go through their books thoroughly…
Identifying Embedded Leases in Contracts Under ASC 842
We previously discussed how FASB had discussed changes in ASC 842: Lease Accounting in Rate Implicit in the lease as well as the determination of IBR. The board has also outlined the concern presented by some preparers about the identification of leases embedded within a contract. The main issue was that entities spent significant amounts of time trying to identify and account…
ASC 842: Lessee Application of Implicit Rate vs. IBR
In a previous post, we discussed how FASB is finalizing a change in ASC 842: Lease Accounting. As it stands, the change is set to impact every business that adopts GAAP to settle their books. FASB had been releasing updates every now and then to ensure that the new changes are well understood and implemented by the effective date. Although…
ASC 842: Choosing the Right Incremental Borrowing Rate
The problem of determining the rate implicit in a lease also presented a concern that most preparers used the incremental borrowing rate (IBR) as the discount rate. However, that wasn’t the only concern that came to light during FASB’s roundtable in September 2020. Apart from the rate implicit, members also discussed the IBR; i.e., how those that have adopted ASC 842 determine the IBR. It…
Private Companies Transitioning to the New FASB ASC 842 Standard
The experiences of public companies in transitioning to the ASC 842 lease accounting standard have underscored the complexities and potential pitfalls of the process. These lessons learned are invaluable for private companies, who must heed these insights as they approach their own compliance deadline at the close of 2020. Among the key challenges faced by…
New Lease Accounting Standard: Key Challenges in Implementation
A survey on the impact of the new lease accounting standard (as it pertains to lessees) was recently completed and its results validated some of the feedback that we have been providing over the last few years about how organizations are responding to the new change and major pain points that must be addressed as…
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