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COVID-19's Impact on 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…
ASC 842: Spotting Embedded Leases in Contracts
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: Implicit Rate vs. IBR for Lessees
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: Selecting the Best 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…
Lease Accounting Standard: Key Implementation Challenges
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…
ASC 842 Lease Standard: Understanding Executory Costs
One of the areas of the new lease standard that has not received that much attention is executory costs. However, as lessees consummate new leases that must be transitioned into the new standard, this is an area that should not be overlooked. Executory Costs that Transfer a Good or Service The new lease standard only…
ASC 842 Lease Accounting Standards & Technology Requirements
Earlier this week, I participated on a webinar on the new lease accounting standards. The webinar was given by one of the major accounting firms and was specifically directed at how the new lease standards will impact lessees. One of the polling questions asked of participants during the course of the webinar was whether, in…
Sage Intacct & iLeasePro Unveil Major Integration Enhancement
iLease Management LLC (“iLease”), developer of iLeasePro, an enterprise cloud-based Lease Management and Accounting solution, has announced a major step forward in its strategic partnership and integration with Sage Intacct, a leader in cloud-based financial management and accounting software. iLease has released the capability to take advantage of Sage Intacct’s dimension feature to seamlessly track…
Implementing the New Lease Accounting Standard: A Guide
Leases (Topic 842) was issued by the Financial Accounting Standards Board (“FASB”) in February 2016 and represented a rather substantial change in how leases are to be accounted for, especially for lessees. More than 30 months have gone by and the effective date to implement the new standard is fast approaching. The effective date for…
The New Lease Accounting Standard: Evolving Record-Keeping Practices
The implementation of the new lease accounting standard, ASC 842, represents a pivotal moment in the world of finance and accounting. While its primary objective is to enhance transparency and comparability in financial reporting, one aspect that demands attention is how record-keeping practices will evolve under this comprehensive standard. 1. Enhanced Visibility: One of the…
Transition Options for Lease Accounting Standards
The Financial Accounting Standards Board (FASB) has recently taken a significant step in easing the transition to the new lease accounting standard by issuing a proposed Accounting Standards Update (ASU). This proposal offers organizations an additional transition option, which could prove to be a welcome relief for many in the business community. Under this proposed…
Understanding Lease Standards in Governmental Accounting (GASB)
In June 2017, the Governmental Accounting Standards Board (“GASB”) issued Statement No. 87 – Leases which establishes new accounting standards to be applied to all lease transactions for state and local governments. The Standard is effective for fiscal periods beginning after December 15, 2019 with earlier application encouraged. The governmental standard follows most of the…
iLeasePro Launches Subsidiary and Operating Entity Features
The Subsidiary function within iLeasePro offers a powerful solution for corporations with complex organizational structures, encompassing multiple subsidiaries. This feature streamlines lease portfolio management by enabling the centralization of all lease data on a single iLeasePro platform, regardless of how many subsidiaries are involved. One of the key advantages of this function comes into play…
iLeasePro's LinkedIn Group on Lease Accounting Continues to Grow
The growth and engagement in the LinkedIn group, FASB and IASB Lease Accounting Changes, is indeed a testament to the increasing awareness and significance of lease accounting changes. With nearly 500 members actively participating in discussions, the group has evolved into a vibrant hub for professionals looking to navigate the complexities of these accounting standards…
New Lease Accounting Guidance Released
The Financial Accounting Standards Board (“FASB”) issued the new lease accounting standard on February 25, 2016. As it pertains to lessees, the new standard requires that the liability for all leases (except narrowly defined short-term leases) must be recognized on the balance sheet of a lessee at the discounted present value of future lease payments…
FASB Finalizes Lease Accounting Standards
In a highly anticipated move, the Financial Accounting Standards Board (FASB) is gearing up to unveil its long-awaited lease accounting standard. According to a report from Bloomberg BNA, the release is scheduled for Thursday, February 25, 2016, marking a significant turning point in the realm of accounting and financial reporting.
FASB Set to Release Lease Accounting Standard
Exciting developments are underway in the world of U.S. lease accounting as the Financial Accounting Standards Board (FASB) gears up to issue new rules that promise to have far-reaching implications for the balance sheets of numerous companies. According to sources within the FASB, it is anticipated that these groundbreaking lease accounting standards will be officially released in the last week of February.
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