Adopting ASC 842: Are You Ready? Your Guide to Implementing the New Lease Accounting Standard

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Adopting ASC 842: Are You Ready? Your Guide to Implementing the New Lease Accounting Standard

Download Guide Now

May 04, 2022

With lean accounting and finance departments, and an ever-changing accounting landscape, companies often struggle with the accounting and financial reporting requirements of non-recurring transactions and adoption of new standards. The new lease guidance, ASC 842, can be especially complex and time-consuming.

We’ve developed Your Guide to Accounting Standard Codification (ASC) 842, which provides practical direction and key takeaways to help you navigate the transition to ASC 842. The guide contains the following:

  • 5 Actions to Take: Our professionals identify the five most important actions for private companies to take regarding ASC 842: Avoiding a delayed transition, maintaining the completeness of your lease population, and more.
  • Key Considerations for Private Companies: How much time do companies have to implement ASC 842? What practical expedients exist, and how should companies approach the completeness of a lease population? We answer all of these.
  • Impairment Considerations: Right-of-use (ROU) impairment testing has direct implications that companies should consider when adopting ASC 842. Our professionals detail how to apply a risk-free rate, how to evaluate renewal options, and how to understand impairment risk under ASC 842.
  • How to Calculate the Balance Sheet Impact: ASC 842 requires companies to recognize and calculate a lease liability and a ROU asset. We look at how to calculate these values from the initial adoption of ASC 842 adoption to subsequent calculations going forward under the new standard.
  • Lease Accounting Considerations in Business Combinations: Undergoing a business combination has several important ramifications on accounting for newly acquired leases. We look at what companies need to know when acquisitions bring new lease terms and payments to deal with on the balance sheet.

With extensive experience in all aspects of lease accounting, including already helping approximately 100 companies implement the new standard, our professionals are positioned to support your adoption of ASC 842. We personalize our adoption and post-adoption support to each client dependent on their needs, budget, and resources. And since we are not a CPA firm, we are able to offer a full range of deliverables, that include supporting schedules, journal entries, and accounting memorandum.

 

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Questions? Contact Jeremy Enuson, Director, Accounting & Reporting Advisory