ASC 842, Lease Accounting
If your company deals with leases - whether as a lessor or lessee - your world is about to change. That’s because ASC 842, Leases from the Financial Accounting Standards Board (FASB) will soon be in full effect and it will have a dramatic impact on all business property or equipment leases.
ASC 842 will demand significant accounting and reporting changes. Your accounting department will be required to implement new processes and internal controls, consider and install software solutions and institute new training and compliance practices.
At Wiss & Company you’ll find a trusted partner in full implementation of ASC 842. We can help ease the transition and make it as smooth and hassle-free as possible. First let’s take a closer look at the new standard.
About ASC 842
The purpose of Accounting Standards Codification 842, Leases is to gain greater transparency in reporting. The changes start with the very definition of a lease. Other key changes include:
- Companies will recognize a right-of-use asset and a lease liability on the balance sheet for leases longer than 12 months.
- Classification will have differing impacts on the balance sheet and income statements.
- New definition of indirect costs likely resulting in fewer capitalized costs
- Significant amount of financial statements disclosures
Effective for private companies with fiscal years beginning December 15, 2020, and effective for private companies with calendar years ending December 15, 2021.
The deadline is much sooner than you think. That’s because it could take several months to fully adopt and implement these changes.
Our Partner Relationship
At Wiss & Company you’ll find a trusted partner in the understanding, adoption and implementation of ASC 842. You’ll receive active and responsive involvement and open lines of communication every step of the way.
You can expect:
- Best practices guidance
- Identification and classification of your leases and extraction of relevant data points
- Preparation of quantitative and qualitative disclosures
- Interpretation of codification
- Assistance with implementation and transition requirements, such as the election of practical expedients
- Evaluation of, and assistance with, existing lease software
- Any and all other services that fit your specific implementation needs