Software Company Lists Mistakes to Avoid When Implementing Leases Standard
LeaseCrunch, an accounting software company specializing in helping clients with the Financial Accounting Standards Board’s (“FASB”) lease accounting standard, has highlighted the five mistakes companies are making when implementing FASB Accounting Standards Codification (“ASC”) Topic 842, Leases. Some of the mistakes involve not setting aside enough time to analyze real estate leases, overlooking hidden leases, and being unaware of the impact the standard will have on business. Visit the LeaseCrunch website for more on advice on implementing FASB ASC 842. In addition, Cherry Bekaert has selected LeaseCrunch as the software platform to use for assisting clients transitioning to the new lease accounting standard. Learn more in the official press release.
FASB Tweaks Guidance for Leases
In July, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) that includes targeted improvements to its leases standard. ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, introduces a transition model for entities and offers a practical expedient to lessors concerning separation of lease and non-lease components. The new standard also provides entities the option to apply the transition requirements at the guidance’s adoption date rather than the earliest comparative period disclosed in financial statements. For entities that have not adopted Topic 842, the effective date of ASU No. 2018-11 is the same as the effective date. Read More.
FASB Issues Proposed Changes to Lease Accounting Standard
A recently proposed update to the Financial Accounting Standards Board’s (“FASB”) lease accounting standard aims to alleviate the work lessors will have to perform when applying Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). Proposed ASU No. 2018-260, Leases (Topic 842): Narrow-Scope Improvements for Lessors, offers lessors new guidance on the breakout of sales and other similar taxes from their costs, and the recognition of certain expenses and variable payments for lease and non-lease portions of a contract. Landlords and companies that lease equipment to their customers informed the FASB that the amount of work and analysis required by ASU No.. Read More.
More Financial Executives Worried over Implementing Leases Standard
Frustration among financial reporting executives over the Financial Accounting Standards Board’s (“FASB”) new leases guidance is rising. A recent survey on Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), revealed that 29.5 percent of executives say they are unprepared to implement the standard. The percentage is up 7.1 points (22.4 percent) from the same survey conducted in January. With the leases standard going into effect next year for public companies (2020 for private companies), several factors are being contributed to implementation concerns. For instance, most companies consider collecting and tracking information on lease agreements in a financial system a large. Read More.
New Tool to Help with Implementing FASB Leases Standard
The Center for Audit Quality (“CAQ”) has designed a tool to support audit committees in their implementation of Accounting Standard Codification Topic 842, Leases, by the Financial Accounting Standards Board (“FASB”). Preparing for the Leases Accounting Standard: A Tool for Audit Committees includes a synopsis of Topic 842 and the standard’s requirements. The new tool also lists which questions audit committee members should consider for a successful application. Topic 842, Leases, will be effective in January 2019. A recent poll, however, found that only 21 percent of professionals say their organizations are either “extremely” or “very” prepared to implement the new leases standard.
FASB Simplifies Provisions in Lease Standard
The Financial Accounting Standards Board (“FASB”) has asked its staff to prepare a final draft of an amendment to the board’s lease standard that would simplify how lessors account for specific property leases with recurrent service charges. At its March 28 meeting, FASB members agreed to allow lessors combine receipts from property leases and service income related to those leases by meeting certain requirements. To be accounted for as one, the lease part of the rental arrangement and the service charges need to be bound by the same transfer between the tenant and the landlord. Also, the lease contracts will. Read More.