Frequently Asked Questions About FASB’s New Lease Standard
It’s been over a year since FASB issued its new standard on accounting for leases (ASC 842). Most recently the standard was implemented for publicly traded companies. Many of these companies found the implementation to be much more involved than they originally expected and as a result, we have been fielding many questions regarding the new lease accounting standard. Here are a list of lease accounting frequently asked questions that should help you get started.
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*All responses have been provided by the ProNexus Lease Accounting & Implementation team and will be recieved in PDF format.Why did FASB and the IASB change accounting for leases?
- Who needs to implement the new standard?
- When do I need to be compliant with ASC 842?
- How should companies prepare?
- What are the main changes? Are there any differences between ASC 842 and IFRS 16?
- What period are affected by the standard upon its adoption?
- Will I need software to track and account for leases under the new standard?
- How do I know if I have an embedded lease?
- What is the difference between lesae and non-lease components? How are they handled?
- What are the differences between fixed and variable lease payments? How are they handled?
- What is an in substance fixed payment?
- How are the Right of Use Liability and Asset calculated?