Blog Series: FASB Accounting Standards: ASC 842 Lease Standards | Post 3:

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Blog Series|FASB Accounting Standards : ASC 842 Lease Standards |Post 3:

How is the implementation of your company’s FASB Accounting Standards ASC 842 Lease Standards coming along?

Based on interpretation of the notes from the August 2nd FASB Board Meeting, the FASB is expected to issue an exposure draft to provide additional guidance regarding land easement treatment under ASC 842. Per the notes “the Board would provide optional transition guidance that would permit an entity not to apply Topic 842 to land easements that existed before the Topic’s effective date, provided that the entity does not currently apply Topic 840 to those land easements”. That may be helpful for some, but if land easements and right of ways represent a small or no amount of your population of leases it doesn’t relieve or delay any of your current burden.

What types of data should you be collecting to aid in the contract analysis to determine if you have a lease and if you do have a lease, what is the treatment under ASC 842?

Leaseholder
Right To Change
Payment Schedule
Term
Right To Direct
Payment Frequency
Start Date
Date Signed
Contingent Payments
End Date
Termination Penalty
Renewal Options
Leased Asset/Serial Number
Credit Provisions
Renewal Notification
Location
Required Deposits
Renewal Periods
Useful Life
Residual Payments
Auto Renewals
Custom or “Off the Shelf”
Return Provisions
Internal Owner/Approver

 

Some of the data would be used for basic contract management, while other data will be required for your ASC 842 decision making. Having all the data in one central repository will not only help with your decision making, but facilitate post implementation and ongoing processes such as validation and support.

Blog Series: FASB Accounting Standards: ASC 842 Lease Standards | Post 1:

Blog Series: FASB Accounting Standards: ASC 842 Lease Standards | Post 2:

 

 

 

 

 

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