Lease Accounting Standard ASC 842 Impacts on Debt Covenants and Capital Requirements

Lease Accounting Standard ASC 842

Depending on the size and complexity of a company’s lease portfolio, ASC 842 will either have a significant impact on their balance sheet or a minimal impact. However, regardless of what the dollar impact is to the balance sheet, businesses will still have to analyze and meet quarterly and/or annual debt covenants in order to […]

Consequences of Not Being Proactive on Lease Accounting Standard ASC 842

Lease Accounting Standard ASC 842

The fact that business is ever-changing is not new or novel, but most agree that the pace of change is only increasing. Now more than ever, business leaders need to be proactive about unforeseen developments and shifting landscapes. One such shift that requires financial leaders to be ahead of the curve is accounting and financial […]

4 Steps to Implementating the New Lease Accounting Standard

After numerous delays, ASC 842 became effective for private companies and not-for-profits for years beginning after December 15, 2021. Entities that prepare financial statements in accordance with GAAP will be required to fully implement the requirements, which include the recognition of right-of-use assets and lease liabilities on their balance sheets, for their 2022 financial statements. […]

Lease Accounting Adoption Is Near

If your organization has not already adopted lease accounting, the clock is ticking. The amendments are effective for fiscal years beginning after December 15, 2021, meaning that nonpublic companies must adopt the new rules with an effective date of January 1, 2022. Summary of the Changes The most significant change from existing guidance is the […]

Revenue from Contracts with Customers and Leases Implementation Deadlines Extended

Acknowledging the unprecedented impact of Covid-19 and the disruption it has caused for businesses and capital markets, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-05 to provide immediate, near-term relief. Officially, ASU No. 2020-05 extends implementation of the new revenue recognition and lease accounting standards by one year for certain […]

Lease Accounting and CECL Implementation Dates Extended

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Up to this point, US GAAP’s new lease accounting rules for non-public filers were to be applied for annual periods beginning after December 15, 2019. Yesterday, however, the FASB voted to extend the non-public company implementation date for the new lease accounting rules for one additional year.  This would make the new standard effective for […]

Governments Should Prepare Now for Lease Accounting Changes

What is the impact of Governmental Accounting Standards Board (GASB) 87? GASB 87 brings all long-term leases (those longer than 12 months) onto the statements of net position of governmental entities. This stands to have a large impact on financial reporting for governments that participate in leases either as a lessee or lessor. The new […]

Updates to the Revenue Recognition & Lease Accounting Standards

Now that the year-end and quarter-end closes are behind us, many accounting departments are starting to focus on the recent or upcoming accounting standard changes. For example, public companies addressed the initial revenue recognition updates at the end of fiscal 2017, but private companies are looking at the looming 12/31/18 deadline. Lease accounting standard changes […]

8 Things You Need to Know about the New Lease Accounting Rules

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Accountants have been taught since the mid-1970s to review executed lease contracts for any one of four criteria that would dictate whether a lease contract is to be categorized as a capital lease or as an operating lease. While those four criteria are specific, seemingly similar lease contracts are, in fact, being treated differently within […]

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