In 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases. This new lease accounting standard (ASC 842) significantly impacts how private and public businesses across all industry sectors manage, account for, and report substantially all leases, including equipment and real estate. Because of the meaningful accounting changes involved, businesses must begin preparing now to comply with the new standards.
Will your organization be affected? Read more to find out how a trusted partner like Opportune can offer integrated expertise in the range of areas impacted by the adoption of the new lease accounting standard and post-compliance optimization.
ASC 842 requires organizations who lease assets— referred to as “lessees”—to recognize, on their balance sheet, the assets, and liabilities for the rights and obligations created by those leases with terms greater than one year. Auditors will focus on a company’s documentation, presentation, and disclosure of leases. Specifically, ASC 842 impacts:
For public entities, the new lease accounting standard went into effect for the annual period beginning after December 15, 2018, and the calendar year 2019.
The FASB determined that privately held companies are required to adopt the new lease accounting standard for annual financial reporting periods beginning after December 15, 2021. For calendar year-end companies, this means:
The new lease accounting standard can be complex. Let us help you make sense of ASC 842. Leave us your information and we will reach out to see how we can best partner with you.
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