ASC 842 – Leases

Learning Objectives

• To recognize the principles of FASB ASC 842
• To discuss the requirements for identifying a contract under FASB ASC 842
• To discuss what are the performance obligations under FASB ASC 842
• To determine and allocate lease costs under FASB ASC 842
• To identify what are the lessor and lessee perspectives for applying leasing accounting policies?
• To explore the disclosure requirements

Course Description

For many reporting entities, leasing is an important way to obtain access to the property. It allows lessees to finance the use of necessary assets, often simplifies the disposal of used property, and reduces a lessee’s exposure to the risks inherent in asset ownership.

The accounting for leases is changing significantly.

Thanks to the now required implementation of ASC 842, which demands that lessees record nearly all leases on their balance sheets, public businesses are now seeing their balance sheets “blowing up.”

This addition will replace ASC 840: Leases.

It’s not just public businesses, as non-public companies are being put on notice for an upcoming effective date of their own ASC 842 mandates.

The FASB’s proposed delay of the effective date of ASC 842 for non-public business entities has allowed those organizations more time to get their affairs in order. But a recent survey by Deloitte found that only 26% of public company execs say their ASC 842 implementations are complete.

This is especially shocking considering the implementation should already be in effect!

The delay won’t go on much longer, and when it’s time to comply – is your organization ready?

In this CPE webinar on accounting, the speaker Michel Morley answer the following major questions:

• How to recognize principles of FASB ASC 842?
• What are the requirements for identifying a contract under FASB ASC 842?
• What are the performance obligations under FASB ASC 842?
• How to determine and allocate lease costs under FASB ASC 842?
• What are the lessor and lessee perspectives for applying leasing accounting policies?
• What are the disclosure requirements?

Overview

• Identifying a lease in a contract

  8 mins
• Substantive substitution rights

  12 mins
• Right to direct the use of identified asset

  24 mins
• Consideration in the contract

  36 mins
• Contract combinations

  54 mins
• Reassessing lease term and purchase options

  74 mins