ASC 842 Lease Accounting Standards

This course will analyze the Financial Accounting Standards Board's (FASB) lease accounting standards in ASC 842 and the challenges accountants face in implementing these guidelines. Our panel of accounting and auditing experts will assist accountants and auditors in defining what constitutes a lease, classifying leases, and determining proper financial statement reporting, as well as offer advice to facilitate compliance with this standard.

Complying with ASC 842 remains problematic for businesses and their auditors. Standard procedures that companies have in place are often insufficient to ensure compliance. The technology needed to analyze leases across multiple levels of the business is often unavailable, leading to manual reviews of lease agreements. 

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 consideration." Under the ASC, operating leases or right-of-use (ROU) assets are included on the balance sheet. 

Accountants must examine existing leases, lease accounting methods, lease modifications, abandonments, and subleases. Further challenges include determining what constitutes a lease under ASC 842, which requires separating a lease from its non-lease components, and the overlap between ASC 842 and 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's 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.