Archive: leases

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FASB Defers Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842)

As a result of COVID-19, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-05. The ASU provides the option to defer the revenue recognition standard (Topic 606) for one year or to annual reporting periods beginning after December 15, 2019. The option is available for nonpublic entities that have not yet […]
June 8, 2020

Lease Accounting in 70 Seconds

The new lease accounting standard, ASC 842, is one of the most significant accounting overhauls in recent history, impacting organizations across all industries. It may come as a surprise, but any contract has the potential to be or contain a lease under the new guidance, including real estate, shipping, or cloud computing contracts. We’re here […]
November 13, 2019

FASB Votes to Delay New Lease Standard Effective Date

On July 17, 2019 the Financial Accounting Standards Board (FASB) voted unanimously to draft an Accounting Standards Update (ASU) to defer the effective date of the new Accounting Standards Codification 842, Leases. Once finalized, the delay provides privately-held companies with an extra year to adopt the new lease standard. Previously, the standard was scheduled to […]
August 21, 2019

Long-term Lease? Are you Accounting for it Properly?

Regardless of industry or trade, there’s a strong chance that rent makes up a significant portion of your annual expenses and long-term liabilities. Do you have a tangible property lease for more than a year, with total expected payments to be in excess of $250,000? Are you accounting for your long-term lease liabilities correctly? Accounting for long-term […]
November 4, 2016

ABCs to Commercial Lease Clauses

When negotiating a lease, landlords and tenants have different needs to best protect themselves; which typically results in lengthy leasing documents to reflect both sides’ best interests. Now, let’s examine some of the most common terms including guarantees, co-tenancy, renewal options, and kick-out clauses, from both viewpoints. Guarantees Guarantees are essentially a credit facility, used to underwrite […]
September 16, 2016

Rethink Leases and Convergence, Now or Later?

The Financial Accounting Standards Board (FASB) has voted to move forward with its update for lease accounting, sending the standard for final drafting.   Even though this update started as a joint project, with the goal of convergence between the FASB and the International Accounting Standards Board (IASB), in the11 end it appears that separate standards […]
November 23, 2015