Over the past year, many have been focused on meeting the challenges created by the COVID-19 pandemic. Attention has been on ensuring the company’s financial vitality during a period of ongoing change. As a result, many planned projects had to be placed on hold to conserve and reallocate resources. This reality led to special projects and initiatives being placed on hold, including compliance with the new lease accounting standard (ASC 842). Given the new reality, the Financial Accounting Standards Board (FASB) approved a one-year extension to give additional time to comply. This was welcome news for those who were simply unable to take the steps necessary to identify, analyze, reclassify, and update financial statements with the necessary footnotes.
As the recovery continues, many businesses are taking another look at the new standard and requirements. Questions about the number of leases, lease type (including vehicle, equipment, and embedded leases) and which are considered “long term”, must be answered. Unfortunately, this is only the starting point because of the corresponding financial statement adjustments which must also be made. Given the complexities, it is hardly surprising to learn that only 48% of companies have taken steps to address the required changes.
Tackle Your Lease Accounting Challenges
The changes in the new lease accounting standard will impact businesses differently depending on the number of leases held. It’s important to learn about the essentials of the new standard now — how to prepare, what financial reporting changes will need to be made, and the resulting impact on the financial statement — so you’re prepared when they take effect.
Register now for our complimentary webinar, Getting Started with Lease Accounting on August 4, 2021 from Noon to 1pm.