Parker + Lynch Blog Lessons Learned from Implementing FASB ASC 842

By now most public companies have implemented FASB's new lease accounting change, ASC 842. The new standard impacts both lessees and lessors and creates a significant compliance challenge for public and private companies alike. The implementation deadline for private companies approaches. Here's an overview of the new standard and lessons learned from companies who are already compliant. Overview of ASC 842 Under prior rules, lessees did not report operating leases on their GAAP balance sheets. The new lease accounting change classifies leases into finance leases (which transfer control of assets at the end of their term) and operating leases and requires lessees to recognize operating leases as an asset on their balance sheets with a corresponding lease liability. As a result, companies with substantial operating leases will see their assets and liabilities increase significantly under the updated guidance. The new standard also includes some "targeted improvements." There are designed to Read More »