CPA Playbook for Talking to Clients About the New Lease Standard

December 3, 2018 at 8:00 AM / by LeaseCrunch® posted in New Lease Standard, CPA Firms

0 Comments

Have you spoken with your clients about the new lease standard? How many clients have begun preparing for implementation? Since the new lease standard doesn’t go into effect for another year for non-public organizations and most are still dealing with the new revenue recognition standard, we’re hearing that many haven’t put much effort into preparing for the new lease standard.

Given the time-consuming nature of implementing the new lease standard, it’s essential that any client with leases considers developing an implementation plan sooner rather than later. Because your firm will be more frequently interacting with clients in the next few months, it’s a perfect time to bring the new lease standard into the conversation.

In this blog, we’ll offer suggestions for having these discussions in conjunction with your assurance work to help you best prepare your clients for this significant change.

Read More

FASB Amends the New Lease Standard

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

0 Comments

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.  

Read More

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

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

0 Comments

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.

Read More

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 LeaseCrunch® posted in CPA Firms, Lease Components, New Lease Standard, LeaseCrunch®

0 Comments


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?
Read More

How Do I Know If My Lease Has Multiple Lease Components?

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

0 Comments

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?

Read More

Separating Lease and Nonlease Components

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

0 Comments

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.

Read More

What Qualifies as a Lease under the New Lease Standard?

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

0 Comments

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.

Read More

Top Resource Guides for the New Lease Standard

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

0 Comments

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.

Read More

Why Is There A New Lease Standard?

March 7, 2017 at 4:12 PM / by LeaseCrunch® posted in New Lease Standard, IFRS, Lease Payments, FASB

0 Comments

The new U.S. lease standard, ASC 842, is required for public companies starting their fiscal year after December 15, 2018 and all other companies starting their fiscal year after December 15, 2019. Internationally, the cousin of ASC 842 is IFRS 16, which is effective for annual periods beginning on or after January 1, 2019.

Read More