Many Companies Still Face Significant Lease Accounting Challenges
The Financial Accounting Standards Board (FASB) has finalized a one-year delay in the effective date of ASU 842 Leases for non-public business entities. The details of the proposal, including a description of affected entities, were described in a previous alert.
The new effective date for calendar-year-end preparers that are not public business entities would beJan. 1, 2021. The effective date for calendar-year-end public business entities, employee benefit plans, and not-for-profit conduit bond obligors is Jan. 1, 2019, and would remain unchanged.
Even with the ASC 842 delay, many private companies still face significant challenges when it comes to building internal controls that will help them identify relevant leases and comply with the new rules. It’s likely that the best solution will be some combination of software and advisory services offered by your CPA firm.
The time to start considering an action plan for ASC 842 compliance is now. For more information on how the new lease accounting standard could impact your business, contact Katy Al-Khalidi at 716.847.2651 for a complementary discussion of your situation and a road-map to lease accounting compliance.