Lease Accounting Guide

How Will the FASB’s New Guidelines Impact Your Accounting?

New guidelines from the Financial Accounting Standards Board (FASB) require lessees to recognize most leases on their balance sheet through a right-of-use (ROU) asset and corresponding lease liability. This could impact your ratios and certain covenants.

This guide gives the details and explanations you’ll need to:

  • Understand the scope and underlying principles of Accounting Standards Codification Topic 842, Leases
  • Identify leases
  • Distinguish operating leases from finance leases
  • Present leases on your balance sheet, income statement, and statement of cash flows
  • Account for nonlease components, purchase options, variable lease payments, and initial direct costs
  • Navigate complex arrangements involving lease modifications, subleases, sale-leaseback transactions, lease incentives, and related-party leases
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