The New Lease Accounting Standard: Adopting ASC 842

The New Lease Accounting Standard: Adopting ASC 842

The Accounting Standards Codification 842 was issued by the Financial Accounting Standards Board (FASB) in 2016 and is now effective for years ending on or after December 15, 2021. The new standard creates right-of-use assets and lease liabilities for leases with terms of longer than 12 months, renames capital leases as finance leases and changes the accounting treatment for operating leases. Though released in 2016 with an effective date of fiscal years beginning after December 15, 2019, the lease accounting standard was delayed twice, most recently due to the COVID-19 pandemic.

With the delay of implementation, some organizations may need a refresher on ASC 842. Below is a downloadable PDF that summarizes the standard, including:

  • Finance versus Operating Leases
  • ASC 842 Practical Expedients and Transition Requirements
  • Short-Term Lease Exemption
  • Related Party Impact
  • Reassessing Lease Terms

If you have any questions about ASC 842, Leases, please contact a BSSF advisor today!

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Posted In: Audit | Downloadable Resources

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