A guide to lessee accounting under ASC 842 assists middle-market lessees in applying the leases guidance in Topic 842, Leases, of the Financial Accounting Standards Board’s Accounting Standards Codification (ASC).The most significant change for lessees under ASC 842 …
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  • All rights reserved. Based on ASC 842-10-15-3 and 842-10-15-4, the lessee must have direct control over the asset or be in a position to direct the manner and nature in which it is used. • Transition date January 1, 2019 for … Because ASC 842 only requires a company to apply the new rules to leases in place as of the adoption date, the FASB's relief allows a meaningful reduction in the work required to apply the new standard. Other entities, including private companies, were granted a later adoption …
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  • Under the modified retrospective approach, ASC 842 …
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  • The conclusion will include transition guidance including a practical illustrative example. All rights reserved.
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    Further, the author(s) conclusions may be revised without notice with or without changes in industry information and legal authorities. £Û+Ä1W…Q´ºpG›eÃ4[ÅÙô³ì±F»Û©èƒ­Eó"3©ª.ƲCñ»¬Q\jƽ­B%¨ù–!’U€?ºTXÏæ[x»ÁÚ9Øæ¤~©5Yux‰¯º£ð`ä¿óçñã\¸›ñêC)!žÎO–Oúo!ášÑэHåzž-9$ƒžÊYI!í´Tû•ú(Â5]ž±A¨û# ¯Â¹Ýxäö5LiŸ¥óý2>8ûüѾ,Ü B~&$£ï²¼pÏjNâu˜e?
    Such analysis and conclusions should not be deemed opinions or conclusions by DHG or the author(s) as to any individual situation as situations are fact specific.
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  • Note the comparisons to ASC 840 throughout the article; much of the common knowledge from ASC 840 can be leveraged in working through the complexities of ASC 842.
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  • During the implementation of ASC 842 and for leases entered into subsequent to the adoption of ASC 842, companies must determine whether a lease includes a lease component and one or more non-lease components.
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  • Operating leases have proliferated over the years for accounting reasons as well as the desire to reduce maintenance …
    842-10-55-248 Example 29 illustrates lessee accounting for the transition of existing operating leases when an entity elects the transition method in paragraph 842-10-65-1(c)(1).
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  • For other entities, ASC 842 goes into effect for fiscal years beginning after December 15, 2021 (i.e., will be effective for calendar year-end companies on January 1, 2022.)
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  • (ASC 842-20-55-53 provides an example of these disclosures.)
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  • FASB ASC 842 Lease Accounting Handbook 5 Exhibit 1: Executive Summary of Proposed Lease Accounting Rules Timeline: • The final standard issued in 2016 . A description of significant judgments made in applying ASC 842 to the lease population …
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  • ASC 842 currently requires entities to use a “modified retrospective” transition approach that is intended to maximize comparability and be less complex than a full retrospective approach. … Glossary of key terms • Commencement date of the lease (commencement date) — The date on which a lessor makes an underlying asset available for use by a lessee.
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  • not the transition guidance). Rob Cherry, Senior Manager DHG Professional Standards Group.
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  • ASC Topic 842 (ASU 2016-02, ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20, ASU 2019-01, ASU 2019-10, ASU 2020-02, ASU 2020-05) All companies with leases in the scope of ASC 842 ¯bž‰bV°üábò¬Ü™È† ^ Ét¸Ç€À!øÚ¦ÃQ¾œQŒW/æM†`¨„‘²°¦¥”úD3=ČWh„¢çØ­K´TŠ½pΠî)-Ã5£ëÇ:Ü0ŠMi*2~®MÑ%…JÎ/j¡» àrª3ERã#$° ø´²!h¥y!Á>P’_ÃNה@iñám‰=¼… +„fT‚2Ù šß/J¯Å»v…Ëÿåó¦ûd„çÂU.TO PŠäJƒ^žÿÚ2zoÏÎóŸo¿-ÿ«¢¨¡ñø‹.łåë6yæõsÆ ÀôVpš8-ª“:Ò»Œ  §%ÚDÛ¤4z[š;‰ h‹´0=j¤ó{ªA'Ñ KPMG illustrates SAB 74 example transition disclosures for adopting ASC 842. We provide detailed Q&As, examples and observations, as well as comparisons to legacy US GAAP, updated for continuing developments in practice.
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