Get Prepared for ASC 842 租赁会计 Standard

Private companies and nonprofits will soon be subject to the ASC 842 租赁会计准则. Adoption of this standard is effective for annual reporting periods ending after December 15, 2021. For calendar year-end companies, this means the effective date is January 1, 2022. For companies that have a fiscal year-end, the effective date would be the first interim period after their fiscal year-end (i.e., the effective date for a fiscal year-end of June 30, 2022, would be July 1, 2022).

帮助你开始, we’ve put together six steps you should take to prepare your company for ASC 842 compliance:

1. 检查你的总账账户.

检查你的总分类帐户, looking specifically for fixed recurring and variable payments for existing leases and other contracts, which may have embedded leases under the new standard.  Embedded leases are determined by the lessee’s use and control over any identified assets in the agreement. The most common embedded lease is typically within an IT service contract if it specifies underlying hardware that may be included.

2. Inventory your Contracts and Review Key Terms and Payments.

Create an inventory of your contracts and review key information in those contracts, 包括固定支付, 索引支付, 更新选项, 剩余的担保, 初始直接费用, 租赁激励, 以及购买选项.   除了, payments to the lessor may include fixed non-lease payments such as insurance, 维护, 和税收. There is a policy election that allows these costs to be included should a company desire to do so.

3. 分开固定和可变付款.

Fixed lease payments are those recurring payments that are the same amount each month, including payments with a fixed percentage increase based on specified dates or anniversaries.  与此形成鲜明对比的是, a payment based on an unknown future rate such as the CPI index or lessee’s sales are considered variable.  These are treated differently under the new standard.

4. Consider Policy Elections and the Election of Practical Expedients.

选举的政策选择:

  • Combine fixed lease and non-lease payments
  • Use the interest-free rate to avoid determining the discounted rate
  • Exclude leases with payments of twelve months or less
  • Apply the same discount rate to a class of assets or assets with a similar lease term

 实际堆放选项:

  • 必须作为一个团体来选举吗
  • Not to reassess expired or existing contracts that contain leases under ASC 842
  • Not to reassess operating and capital leases under ASC 840 that will be operating and financing leases under ASC 842
  • Not reassess 初始直接费用 for existing leases

独立的选举

  • May elect to use hindsight to reassess leases for determining the lease term, 购买选择, 和终止付款

5. Evaluate Contracts to Determine 融资租赁 Vs. 经营租赁的分类

融资租赁

  • 将所有权转让给承租人
  • The purchase option is reasonably sure to be exercised*
  • The lease term is the major part of the economic life of the asset
  • The present value of the lease payments and residual value is substantially all the asset fair value
  • The asset is specialized in nature for the lessee and has no alternative use

* Example is a 60-month equipment lease with monthly payments of $500 with an option to purchase of $100, 承租人打算行使哪一项权利.

经营租赁

  • 所有权归出租人所有
  • There is no option to purchase the asset
  • The lease term is 不 a major part of the asset’s economic life*
  • The value of the lease payments does 不 equal or exceed the fair value of the underlying asset
  • The asset is 不 so specialized to only have use for the lessee

* For example, an office lease with 60 monthly payments of $4,000 (for a total of $240k) would be considered a major portion of a $2m building’s economic life of 30 years.

6. Evaluate Financial Statement Adoption Options.

  • 生效日期的方法 – The comparative reporting period is unchanged, and any cumulative effect is applied at the beginning of the adoption period. This eliminates the need to restate the prior period presented
  • 比较方法 – The earliest period presented is restated at the beginning of the period

For more information or help with your ASC 842 adoption requirements, don’t hesitate to email us at info@www.ronmcintyre.com.

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