Lease Accounting Resource Center

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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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Do you want a BKD professional to speak to your group about how the proposed lease accounting changes could affect your organization? Fill out the form below, and BKD will contact you with more information.

Need Help with Lease Accounting?

Need help implementing GASB 87 and FASB Accounting Standards Codification (ASC) 842 on lease accounting? We’ve got you covered. BKD’s comprehensive three-part solution can help you implement GASB’s and FASB's lease standards with ease. BKD LeaseVision uses an artificial intelligence (AI) tool 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-based tool to help perform calculations and develop lease amortization schedules.

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