Ane Ohm


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What We Want to See Happen With the New Lease Standard in 2019

January 15, 2019 at 1:00 PM / by Ane Ohm posted in FASB, New Lease Standard, CPA Firms, Technology

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As we kick off 2019, everyone posts predictions for the coming year and I enjoy reading those as much as the next person. With
the new lease standard, it seems that predictions are more along the lines of, “the sky is falling!” There are only so many times we can hear that we’re in dire straits, so I thought I’d shake it up a bit.

 

Understanding the reality and the timeline of the new lease standard, what do I want to happen in 2019? Read on for my wishlist.

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Ask the Expert: John Hepp Discusses the New Lease Standard

December 17, 2018 at 1:21 PM / by Ane Ohm posted in FASB, New Lease Standard, CPA Firms, IFRS

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Important note:
This is a judgment-based standard, which means there are few hard-and-fast rules and the treatment of your leases will depend on your unique situation. It's important that you always double-check decisions with an accounting professional who knows your circumstances. This blog should not be considered or take the place of professional advice or services.

We’re excited this month to share insights from our recent conversation with industry expert John Hepp. John is a retired partner from Grant Thornton and a former FASB project manager. He holds a PhD from the University of Wisconsin-Madison and is currently on the faculty at University of Illinois at Urbana-Champaign.

John discussed several nuances of the new lease accounting standard, from practical expedients (“the spoonful of sugar to help the medicine go down”) to discount rates and much more.

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5 Mistakes to Avoid When Implementing the New Lease Standard

October 17, 2018 at 10:00 AM / by Ane Ohm

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The new lease standard is more complicated than companies expect and therefore often underestimated. Because of this, we are seeing some unfortunate trends as the new lease standard is implemented. Read on for the top five mistakes we’re seeing to avoid these challenges for your organization.

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FASB Amends the New Lease Standard

August 15, 2018 at 11:19 AM / by Ane Ohm posted in LeaseCrunch®, FASB, New Lease Standard, CPA Firms

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LC_Blog_AUG-04

On July 30, 2018, the FASB issued a greatly anticipated ASU related to the new lease standard. ASU 2018-11, Leases (Topic 842), Targeted Improvements, has two provisions that are intended to make transition to the new lease standard easier and less costly. One is an additional transition method, providing transition relief that will be of great interest to lessees and lessors. The other provides a new practical expedient for lessors in their identification and separation of lease components.  

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How the New Lease Standard Affects Accounting for Common Area Maintenance (CAM)

June 26, 2018 at 7:00 AM / by Ane Ohm posted in LeaseCrunch®, Lease Components, New Lease Standard, CPA Firms

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The new lease standard, ASC 842, changes the treatment of common area maintenance (CAM) within a real estate lease contract. Many real estate leases include some form of CAM, such as cleaning a building lobby, snow removal, landscaping, or janitorial services. Here are some things you need to know about CAM, including what is changing and a few practical examples.

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What Can CPA Firms Do Now To Help Clients With Policy Decisions in the New Lease Standard?

May 14, 2018 at 9:00 AM / by Ane Ohm posted in LeaseCrunch®, Lease Components, New Lease Standard, CPA Firms

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Policy elections that must be made under the new lease accounting standard are a critical part of implementation planning. They impact your clients’ future accounting and financial statement disclosures and your clients may not have even considered them yet. For example:

  • Do they understand the difference between lease and non-lease components?
  • Do they know that there is a short-term lease exception available?
  • Do they know how they want the presentation of lease assets and liabilities on their statement of financial position to appear?
  • Do they know that there are a number of practical expedients available that can save them time, but that they must elect them?
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How Do I Know If My Lease Has Multiple Lease Components?

June 1, 2017 at 7:26 AM / by Ane Ohm posted in Lease Components, New Lease Standard

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Lease accounting is applied at the lowest asset component. As a result, after you have identified the lease and nonlease components, you as the lessee should determine if the lease contains more than one lease component. You will do this by identifying the individual asset units and their relationships.

You determine if a lease has separate lease components by considering the interdependencies of individual assets covered in a contract. A key consideration is whether the supplier will use multiple assets, or a group of assets that work together, to fulfill the arrangement.

For example, if a customer leases 15 computers and monitors from a technology supplier, then there are clearly multiple assets involved in fulfilling this arrangement.

Is there one or many leases?

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Separating Lease and Nonlease Components

May 24, 2017 at 7:18 AM / by Ane Ohm posted in Lease Components, FASB, New Lease Standard, Lease Payments, IFRS

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Identifying lease and nonlease components

Not all costs related to a lease are included in the leased asset and liability. For example, a lessor may lease a truck and also include a provision to operate the truck on behalf of the lessee. Providing a driver, maintenance and gas are not related to securing the use of the truck and these costs would be considered nonlease components. Another example of a nonlease component is the fee for common area maintenance when renting office space.

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What Qualifies as a Lease under the New Lease Standard?

April 12, 2017 at 7:07 AM / by Ane Ohm posted in New Lease Standard, Lease Payments, IFRS

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Not all arrangements qualify as a lease under the new standard. Of course, sometimes it’s easy to figure out if it’s a lease: renting your office space definitely qualifies as a lease. Copier and vehicle leases are, in fact, leases.

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Top Resource Guides for the New Lease Standard

April 1, 2017 at 6:40 AM / by Ane Ohm posted in FASB, New Lease Standard, IFRS

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The new lease standard is coming and preparation is critical for a smooth implementation. This is easier said than done and the experts agree: this new standard is complicated.

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