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Lease accounting implications for private companies

How to prepare for the new lease accounting deadline

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Lease accounting implications for private companies

In January 2019, Accounting Standards Codification Topic 842, the FASB’s new standard on accounting for leases, took effect for public companies with calendar year-ends. Generally, implementations took more resources and time than expected, so private companies, which will need to adopt the rule starting in 2021, should take note. In this Consumer Speaks accounting and reporting podcast, Rich Paul, Deloitte & Touche LLP’s US Audit & Assurance Consumer industry leader, speaks with Deloitte & Touche LLP Audit & Assurance partner Jeanne McGovern and Audit & Assurance senior manager Lauren Pesa. They discuss five lessons learned from public company adoption of the standard, as well as considerations for private companies in the consumer industry.

Lease adoption requires more cooks in the kitchen than just accounting.

Lease accounting implications for the consumer industry

The new lease accounting standard is expected to have a significant impact on companies in the automotive, consumer products, retail, wholesale and distribution, and transportation, hospitality, and services industries. What can consumer industry companies do now to prepare?

New lease accounting standards: What private companies need to know

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, 2021 (calendar 2022) for private companies. These standards bring many leases onto the balance sheet and could significantly affect a business's financial statements.

Lease accounting (ASC 842) for private companies

Lessons learned from public company implementations

Public companies have had 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 2022 deadline. Explore the five lessons learned we’ve observed.
 

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On the Consumer Speaks accounting and reporting podcast series, you’ll hear from our Deloitte leaders and professionals as they share their experiences and insights on timely topics across the automotive, consumer products, retail, wholesale and distribution, transportation,  and hospitality, and services industries. Stay informed on the hottest topics facing these industries and how they can affect your business.

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This podcast contains general information only and Deloitte is not, by means of this podcast, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This podcast is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this podcast.

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