FASB’s new lease guidance, Accounting Standards Codification (ASC) 842, is now effective for public entities, which include public business entities, employee benefit plans and not-for-profit conduit bond obligors. Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), requires lessees to recognize all leases with terms greater than 12 months on their balance sheet as lease liabilities with a corresponding right-of-use asset. Since its issuance in 2016, FASB has added considerable additional optional relief in the form of practical expedients and accounting policy elections. FASB is now considering additional time for some entities.* An exposure draft proposing later effective dates for some entities is expected in the third quarter of 2019 and a final standard could be issued before year-end.
The adoption of ASC 842 will be complex and likely will require significant hours to implement correctly. BKD can help educate your team, provide implementation tools and assist with analysis and documentation. If you would like assistance complying with the lease standard, contact your BKD trusted advisor.
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