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Grant Thornton helps navigate FASB leasing guidance

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Young business woman standing in office lobbyGrant Thornton has released a publication, Leases: Navigating the guidance in ASC 842, to provide a detailed manual on the FASB’s new lease accounting standard codified in ASC 842, Leases. Our guide also discusses the three updates subsequently issued to clarify or amend the new leasing guidance,  ASU 2018-01, Leases (Topic 842): Land Easements Practical Expedient for Transition to Topic 842, ASU 2018-10, Codification Improvements to Topic 842, Leases (ASC 842, Leases) and ASU 2018-11, Targeted Improvements (ASC 842, Leases).

ASC 842 should be applied to:

  • Determine whether a contract is or contains a lease
  • Identify lease and non-lease components in a contract
  • Classify the lease component(s)
  • Measure and recognize the lease component(s)
  • Recognize lease expense or lease income over the term

ASC 842 is effective for public business entities in fiscal years beginning after December 15, 2018. The effective date for most other entities is deferred for one year, meaning that most calendar-year private companies will be required to adopt the new standard in 2020. Early adoption is permitted for all entities. 

Leases: Navigating the guidance in ASC 842 summaries the FASB guidance using illustrative examples that help to demonstrate how to apply the guidance. The guide includes “Grant Thornton insights” on a various topics and “At the crossroads” to provide examples of how the guidance could differ from legacy GAAP. 

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Contact
Ryan Brady
Partner, Accounting Principles Group
T +1 312 602 8741