{"id":25544387,"date":"2023-01-30T15:47:00","date_gmt":"2023-01-30T15:47:00","guid":{"rendered":"https:\/\/kn.wmhosts.com\/?p=25544387"},"modified":"2024-04-04T02:37:36","modified_gmt":"2024-04-04T02:37:36","slug":"lessons-learned-during-an-asc-842-leasing-implementation","status":"publish","type":"post","link":"https:\/\/kn.wmhosts.com\/?p=25544387","title":{"rendered":"Lessons learned during an ASC 842 Leasing Implementation"},"content":{"rendered":"\n

What are the hot topics related to implementation of the new leasing standards?<\/p>\n\n\n\n

While most companies have already implemented IFRS 16 or ASC 842, there are still some non-public entities yet to implement. I have just recently completed an implementation for a company in the aerospace industry, and thought I would pass along a couple of lessons learned & topics to watch out for that you won\u2019t necessarily find reading the standard itself\u2026.<\/p>\n\n\n\n

    \n
  1. Identifying all leases – <\/strong>This is not always obvious, there may be embedded leases in agreements that management has not flagged as a lease. A good way to find these is to scrub the ENTIRE GL (not just lease expense) for keywords.<\/li>\n\n\n\n
  2. Non-cash consideration – <\/strong>Do some leases look more like a “barter” transaction (ie receiving the use of an area in exchange for a service)? This adds complexity to measuring the ROU asset & lease liability – you will need to spend time to fair value these two transactions separately.<\/li>\n\n\n\n
  3. Integration with other standards – <\/strong>Following on point #2 above, some leases may be tangential to a revenue activity and calculations will need to integrate between the two standards. This adds to complexity, time to implement, and ongoing efforts to maintain your workpapers.<\/strong><\/li>\n\n\n\n
  4. Additional disclosures – <\/strong>Both ASC 842 and IFRS 16 include additional disclosure requirements, such as nature of leases, information about ROU assets\/liabilities, and cash outflow timing\/maturities. Make sure you have disclosure tables built into your workbook to be able to easily update disclosures as new leases are added.<\/li>\n\n\n\n
  5. Lease database – <\/strong>The above lessons show the value in creating a lease database early. Even when you only have a handful of leases, having the correct workbooks, formulas, and disclosure tables in place will tremendously ease the burden as your company continues to grow!<\/li>\n<\/ol>\n\n\n\n

    Do you have anything to add as part of your leasing implementation work? Please let me know below!<\/p>\n","protected":false},"excerpt":{"rendered":"

    What are the hot topics related to implementation of the new leasing standards? While most companies have already implemented IFRS 16 or ASC 842, there are still some non-public entities yet to implement. I have just recently completed an implementation for a company in the aerospace industry, and thought I would pass along a couple […]<\/p>\n","protected":false},"author":2,"featured_media":25544418,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[15],"tags":[19,16,20],"dipi_cpt_category":[],"class_list":["post-25544387","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-new-accounting-standards","tag-implementation-project","tag-leases","tag-project-management"],"yoast_head":"\nLessons learned during an ASC 842 Leasing Implementation - Katrina Nacci, CPA<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kn.wmhosts.com\/?p=25544387\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Lessons learned during an ASC 842 Leasing Implementation - Katrina Nacci, CPA\" \/>\n<meta property=\"og:description\" content=\"What are the hot topics related to implementation of the new leasing standards? 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