ASC 842 replaced ASC 840 after December 15, 2018 for fiscal years and interim periods within those fiscal years for public companies and will go in effect for private companies after December 15, 2019 for fiscal years and interim periods within those fiscal years.
Directed by the SEC and created by the Financial Accounting Standards Board (FASB), the purpose of the new lease accounting standard is to require organizations that lease assets to disclose the assets and liabilities of their leases on the balance sheet whereas the former lease accounting standard (ASC 840) reported operating leases in the footnotes of financial statements.
ASC 842 still classifies lease management in two groups: operating leases and finance (capital) leases and leases lasting more than 12 months must be reported on the balance sheet. However, the ASC 842 standard also requires qualitative and quantitative disclosures on timing, amount and unpredictable cash flows that arise from leases.
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CoStar Real Estate Manager’s 12 Step Lease Accounting Compliance Guide offers step by step compliance procedures with practical, real world insight on how to create a lease accounting compliance plan. Our proven solution has been battle-tested by industry leaders; learn more about implementation success stories with ASC 842 & IFRS 16 Lease Accounting Compliance Software. For more details of ASC 842 developed by The Financial Accounting Standards Board (FASB) and the history of the Accounting Standards Update (ASU), visit www.fasb.org.