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New lease accounting standards: What private companies need to know
Gearing up for ASC 842
- Implementation considerations for private companies
- What private companies need to know about applying the new lease standard
- Gearing up for the new lease accounting standard
- Identifying embedded leases for private companies
- Our team
The new international financial reporting standards (IFRS) lease accounting standard (IFRS 16) became effective as of January 1, 2019 for ALL companies (both private and public); additionally, the Financial Accounting Standard Board (FASB) lease accounting standard (ASC 842) will take effect periods beginning after December 15, 2020 (calendar 2021)1 for private companies. These standards bring many leases onto the balance sheet and could significantly impact a business' financial statements.
Lease accounting (ASC 842) for private companies
Lessons learned from public company implementations
Public companies have been working to comply with the new standard on lease accounting since the beginning of 2019. Analysis of their preparation successes and challenges provides critical ASC 842 lessons for private companies approaching a 2021 deadline. Explore the five lessons learned we’ve observed.
Implementation considerations for private companies
Staying on track with the new lease accounting standard, ASC 842
The purpose of ASC 842 is to bring most operating leases, which are currently accounted for off-balance sheet, onto the balance sheet. As a result, ASC 842 changes the definition of a lease. Find out how to make sense of this complicated standard and develop strategies for overcoming unforeseen challenges in the implementation process.
What private companies need to know about applying the new lease standard
What does the road ahead look like for private companies?
Practitioners have estimated that $2 trillion1 of lease liability will be recorded to S&P 500 balance sheets alone as a result of the application of the new leasing guidance. Read this report, which highlights key considerations related to implementing the new leasing standard.
Gearing up for the new lease accounting standard
Choosing an approach and technology platform to meet the new requirements for private companies
Based on the experiences of many public companies implementing lease accounting technology solutions to comply with the new requirements, it often takes longer than anticipated for a new tool to be fully operational. Achieving compliance could be a complex challenge that may require major changes to systems and processes. Learn best practices for choosing an approach and actions to take sooner rather than later.
Identifying embedded leases for private companies
Are leases hiding in your contracts?
When it comes to ASC 8422 compliance, identifying contracts that contain embedded leases could add another level of difficulty for private companies. Discover how to identify embedded leases and ongoing accounting considerations for implementation.
As you plan for your next stage of growth, make sure your organization is equipped for success. Our team of dedicated professionals understands the challenges that private companies face and offers a broad perspective on business issues, leading practices, and industry trends.
1 On April 8. 2020, the FASB tentatively approved a one-year deferral of ASC Topic 842 for nonpublic business entities. A proposed ASU subject to a 15-day comment period is expected in the near term.
2 Source: Coming to a Balance Sheet Near You: $2 Trillion in Leases, The Wall Street Journal, November 2015.
3 Accounting Standards Codification 842 Leases (“ASC 842”), issued by the Financial Accounting Standards Board (FASB) as Accounting Standards Update 2016-02.
COVID-19 accounting and financial reporting-related resources
This Financial Reporting Alert discusses certain key accounting and financial reporting considerations related to conditions that may result from the COVID-19 pandemic as well as various industry-specific considerations.
Several of the CARES Act’s provisions and programs are designed to assist small and large businesses and include billions of dollars in loan and grant allocations, regulatory relief for certain industries, and income tax relief.
The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.