ASC 842 Lease Accounting Standards

According to ASC 842, "a contract is, or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time, in exchange for a consideration." The most notable change under the new accounting standard that replaces the old ASC 840 is that operating leases or right-of-use (ROU) assets are included on the balance sheet. ASC 842 was effective for fiscal-year private companies for years beginning after Dec. 15, 2021, and for years ending Dec. 31, 2022, for calendar-year private companies.

Accountants must examine existing leases and lease accounting methods. Obvious considerations include how the new standards affect lease modifications, abandonments, and subleases. Further challenges include determining what constitutes a lease under the new definition, separating a lease from its non-lease components, and the overlap of ASC 842 with other accounting standards, including ASC 360 Impairment or Disposal of Long-Term Assets. Additionally, although there are many similarities between ASC 842 and the International Accounting Standards Board leases standard, IFRS 16, there are significant inconsistencies between the two sets of guidelines.

Listen as our panel of accounting and auditing experts analyzes the requirements of the current FASB standard, ASC 842 for Lease Accounting, including tips for implementing and overcoming the challenges of its provisions.

1. ASC 842: an overview
2. What is a lease under ASC 842?
3. Identifying lease and non-lease components
4. Determining lease classification
5. Lease measurement
6. Lease modifications and abandonments
7. Financial statements and disclosures
8. Implementing the new standard
9. Other relevant guidance
10. IFRS 16 differences
11. Best practices

The panel will review these and other critical issues:

• Separating lease and non-lease components in contracts
• Accounting for lease modifications and abandonments
• Required disclosures for lessees and lessors under ASC 842
• Differences in international and U.S. lease reporting standards under IFRS 16 and ASC 842
• Reporting requirements for operating leases or ROU assets
• Recommendations for compliance with ASC 842

Learning Objectives

After completing this course, you will be able to:

• Identify lease and non-lease components in contracts
• Recognize required disclosures for lessors under ASC 842
• Differentiate U.S. lease reporting standards under ASC 842 and IFRS 16
• Determine lease classifications
• Ascertain best practices for compliance with ASC 842

• Field of Study: Accounting
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience, preparing reviewed, compiled, and audited financial statements and the relative disclosures. Specific knowledge and understanding of GAAP, SSARS, and peer review policies.

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