FASB Issues Guidance on Common-Control Lease Arrangements

Learning Objectives

• To discuss the latest information regarding accounting for common-control lease arrangements.
• To review the overall guidance on accounting for common-control lease arrangements. 
• To know how to apply presentation rules and exceptions.
• To review the recognition, measurement, and presentation constraints.
• To look at disclosure and presentation requirements.
• To write the appropriate Notes.
• To know the unique disclosure and presentation requirements of accounting for common-control lease arrangements.
• To analyze the required note disclosures.

Course Description

Accounting for leases between entities under common control is changing. This CPE course describes the latest standard update for FASB Issues Guidance on Common-Control Lease Arrangements.

The objective of this FASB update is to provide clarity and standardization in accounting for leases involving entities under common control, specifically focusing on private companies and related party arrangements. This guidance falls under Topic 842 and aims to provide useful information on lease cash flows, amounts, timing, terms, and conditions while ensuring consistency in reporting. Overall, this update improves current GAAP by addressing lease complexities in common-control scenarios, benefitting investors and providing enhanced financial information for decision-making.

This standard for common-control lease arrangements establishes a practical expedient for private companies and not-for-profit entities that are not conduit bond obligors to use the written terms and conditions of a common control arrangement. 

Major Topics Covered:

• Basic concepts, scope, and applicability of accounting for common-control lease arrangements.
• Planning the approach: accounting for common-control lease arrangements.
• Sizing up the impacts of accounting for common-control lease arrangements: questions you need to ask.
• Specific rules and unique provisions for accounting for common-control lease arrangements.
• Disclosure and presentation requirements.
• Notes to financial statements.

Join this CPE Accounting Webinar, which outlines an easy-to-understand step-by-step procedure for accounting for common-control lease arrangements.

Overview

• Objective of Topic 842 (With update)

  3 mins
• Commencement date of the lease

  11 mins
• Lease modification

  23 mins
• Orderly transaction

  35 mins
• Unguaranteed residual asset

  49 mins
• Transition and effective date information

  62 mins
• Lease of a related party

  71 mins