By LeaseCrunch® on March 7, 2022 at 1:12 PM
Breaking news in the accounting world!
The FASB, or the Financial Accounting Standards Board, has released their changes to the GAAP reporting taxonomy for the year of 2022.
This taxonomy report happens every year in order to ensure that the accounting principles created and enforced by FASB best serve those involved in accounting and financial reporting.
What are Accounting Standards Updates?
Accounting standards updates are changes released by an accounting regulatory body that consist most often of element additions for various topics in accounting. Updates in accounting standards can also come in the forms of pronouncements released by either FASB or GASB.
The elements for these topics can be deprecated in yearly GAAP updates or taxonomy reports because the guidance from which they were derived grew obsolete due to either a lack of relevance to current accounting practices, or because they do not represent current reporting requirements and were not used frequently, if at all.
In order to determine whether or not an accounting standard and its elements should be replaced by a new standard, the FASB takes comments and criticism on whether or not their updates match the needs of accounting and financial reporters.
US GAAP Summary of Taxonomy Report
In the 2022 GAAP updates to accounting taxonomy, there were a few new elements released for reporting:
- Credit losses, excluding accrued interest
- Reinsurance contracts
- Pledged assets
- Debt obligations with recourse
- Change in reporting entity
- Balance sheet offsetting
- Financial statement location of values that aren’t reported separately
Additionally, included in these GAAP updates are:
- Deprecations for guidance that has, since its inception, been superseded
- Standard and documentation labels have been changed to clarify elements and improve usage
- Modifications to references in order to assist with element selection
- Deprecation of elements for combined values of basic and diluted earnings per share
That’s a summary run-down of the 2022 GAAP updates, but you can also read the whole, detailed list of this year’s taxonomy report on this page.
If you don’t even know where to start with this year’s modifications, contact us at LeaseCrunch to demo our lease accounting software that updates to comply with this year’s taxonomy report as it applies to lease accounting.
Has ASC 842 Been Delayed?
Related to this discussion of the 2022 taxonomy report because it falls under the umbrella of accounting standards changes, ASC 842 was delayed in June 2020 in order to afford some relief to non-public companies and entities affected by COVID-19.
While ASC 842 has been effective for public companies since 2019, it is now mandatory for remaining companies reporting under FASB guidelines for fiscal years beginning after December 15, 2021.
Want to learn more about ASC 842 and its implications for lease accounting? Check out our ultimate guide.
How Do You Stay Up to Date with GAAP?
There are several different ways you can stay up to date on GAAPs:
- Read current accounting publications such as Accounting Today, Corporate Finance Institute, the LeaseCrunch blog, or the FASB and GASB posts themselves.
- Read every statement release made my the GASB or FASB
- Alternatively, you can implement lease accounting software into your accounting practices to ensure compliance with the latest in lease accounting and GAAPs.
What is Lease Accounting Software?
Lease accounting software, like LeaseCrunch, is a cost-effective, GAAP-compliant solution to lease accounting. Our automated software completes all lease accounting calculations for you, which means you get to avoid any error or compliance issues that come with manually performing lease accounting. Our software includes:
- Automated Quantitative Footnote Disclosures: This feature helps auditors by providing them with the quantitative disclosures needed to complete footnotes (E.g. Amortization and interest finance lease expense, operating lease expense, weighted-average remaining lease term, weighted-average discount rate, and maturity analysis.
- Leasing “Wizards” for Classification and Lease Term: Our software has wizards that assist our users when they enter elase information. They walk them through each step to evaluate the various components of lease classification.
- Simplified Policy Election Templates: Reduce your time-to-make-policy elections to minutes with lease accounting policy templates for FASB, GASB, and IFRS. The features of our comprehensive policy template include: references to cited sections of the standard, policy snippets, preselected elections based on experience, and more.
- Tooltips and Hints: In order to reduce the number of errors in data entry during the auditing process, LeaseCrunch includes tooltips throughout the application process with a professionally-written summary, consideration for the relevant part of the standard, and a reference to the original and authoritative section of the standard for further information.
Here are just a few quotes from our users about their experiences using LeaseCrunch’s software:
“This product minimized the time it takes to run the lease calculations on a monthly basis.”
“LeaseCrunch stood out because the workflow was simple and easy to follow, the implementation time was much faster, and they offer a Help document to assist on the technical side… Overall, very happy with the product.”
Ready to start using our lease accounting software to handle the new GAAP updates? Contact us today.