Accounting Update with Mike Cheng
Enjoy this recording of Mike Cheng’s most recent Accounting Update!
On February 25, 2016, FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). Under the new standard, companies must record an asset and a liability on the balance sheet for nearly all leases. Office space, equipment, automobiles and other items that are leased will now be reflected on the balance sheet. This marks the start of a new era in accounting, causing lenders and other users of financial statements to adapt to a redefined set of liabilities.
Assessing the impact of the ASC 842 new standard for accounting for leases may be a somewhat daunting task for companies with hundreds (or even thousands) of leases. The new standard applies to embedded leases, which adds complexity to the transition. Many contracts that may not be considered a lease contain embedded lease arrangements. Assembling a schedule of leases and assessing them may require special software to even begin understanding the accounting implications.
The Accounting Advisory team at Frazier & Deeter can help your company make the transition to the new lease accounting ASC 842 standard.
Call us today to schedule a Lease Accounting Assessment Session with our technical accounting team.
Enjoy this recording of Mike Cheng’s most recent Accounting Update!
Calendar year-end private companies and not-for-profit entities reporting under US GAAP are required to adopt Topic 842 (Leases) this year! It may sound as simple as grossing up the balance sheet with a lease liability and a right-of-use asset, but…