PRE-IMPLEMENTATION REVIEW OF INTERNAL CONTROLS
The latest lease accounting standards are far reaching and substantially changes the way organizations record leases.
Organizations need to be prepared to change the way leases are recorded since the updated lease accounting guidance for both governments and private companies are now in effect.
FASB LATEST LEASE ACCOUNTING STANDARD
What is the latest lease accounting standard?
FASB’s updated lease standard introduced major changes in the financial reporting related to lease arrangements. Known as ASC 842, FASB’s update to the lease accounting standard aims to:
- Streamline accounting for leases under GAAP rules
- Reduce the use of off-balance activities
- Improve transparency into the liabilities contained in lease arrangements
When did the updated lease standard take place?
The effective date of the lease accounting standard began after December 15, 2021 for private companies and nonprofit organizations.
Click here to access our FASB Lease Standard Guide.
GASB LEASE ACCOUNTING STANDARD
What is GASB 87?
GASB 87, Leases, is the updated lease accounting standard for public sector and governmental entities. GASB 87 requires all leases to be reported as capital leases. It also eliminates the classification of an operating lease unless that lease is short-term (12 months or less). The lease guidance was updated to provide better information for financial statement users.
When did GASB 87, Leases, take effect?
GASB 87 is currently effective for all government entities. The effective date is for periods beginning after June 15, 2021.
HOW EIDE BAILLY CAN HELP WITH YOUR LEASE ISSUES
Regardless of private company versus public sector, the updated leasing standards have a sweeping impact on organizations. Organizations should focus on implementation early and understand the issues they will face when it comes to complying with the latest FASB and GASB standards.
We have developed steps to help you in implementation of each standard.
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PHASED APPROACH FOR REVIEWING GASB 87 IMPLEMENTATION
HOW CAN I PREPARE FOR IMPLEMENTATION OF THE UPDATED LEASE STANDARD?
1. PREPARE COMPLETE LISTING OF LEASES
2. DETERMINE SOFTWARE NEEDS
3. DEFINE IMPLEMENTATION STRATEGIES
4. EDUCATE KEY STAKEHOLDERS ON THE CHANGES
In addition, Eide Bailly’s skilled team of lease standard professionals can help you define what leases are part of your organization, choose software to help you track the leases and ensure you comply with the latest standards.
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Implementing the Updated Lease Standard
Implementation of the latest lease standard can be complicated. This guide will help you walk through the steps to implement the standard with confidence.
The updated lease standard can be complicated.
Make sure you’re in compliance.