Lease Accounting Resource Center

Thoughtware Resource Published: Aug 14, 2018
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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.

Due to the unprecedent effects of COVID-19, FASB approved a deferral for private companies and all not-for-profits (NFP), including an NFP that has issued—or is a conduit bond obligor for—securities that are traded, listed or quoted on an exchange or an over-the-counter market. For NFP entities that have issued—or are a conduit bond obligor for—securities that are traded, listed or quoted on an exchange or an over-the-counter market, the delay is only effective if the organization has not yet issued or made available for issuance its generally accepted accounting principles (GAAP) financial statements.

FASB also clarified that interim financial information posted to the Electronic Municipal Market Access (EMMA) system—non-GAAP financial information that does not include full disclosures—would not disqualify an entity from taking advantage of this lease deferral.

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.

Lease Guidance
Lease Accounting Optional Relief Chart

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Lease Accounting

Need help implementing lease accounting standards? We’ve got you covered. BKD’s comprehensive three-part solution can help you implement lease standards with ease. BKD LeaseVision can use artificial intelligence (AI) and other tools when appropriate to extract key lease terms from various lease types, a road map to help provide an in-depth process framework, and an Excel template to help perform calculations and develop lease amortization schedules.

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