The New Lease Accounting Standards

Overview

In 2006, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) commenced a joint project to improve the financial reporting of lease activities. Nearly 10 years later, on February 25, 2016, the FASB released the final revised accounting standards with respect to leasing activities through the issuance of ASU No. 2016-02, Leases. This was only shortly after the IASB released its final version of IFRS 16, Leases, on January 13, 2016. While the intent of the joint project was to align the GAAP and IFRS versions of the standards, this was not the end result as the two organizations increasingly went their separate ways throughout the development process.

This course provides an in-depth overview of the new lease accounting standards issued by the Financial Accounting Standards Board (FASB) in February 2016. This includes a discussion of the primary reasons for the change as well as how to identify a lease within a contract. This course also provides an in-depth review of lease classification, initial measurement, subsequent measurement, presentation & disclosure, as well as transition requirements. The course concludes with a discussion of some of the significant differences between IFRS 16 (the IASB’s new lease accounting standard) as well as private company considerations.

Subsequent to the initial release of the new lease accounting standards in February 2016, there have been several accounting standards updates (ASUs) that have further amended the new guidance and made certain technical corrections and improvements. As a result, this course is current through the issuance of ASU No. 2018-11.

Learning Objectives

Upon completion of this course, you will be able to:

  • recognize how the new leasing standard has evolved and how the new standard is organized
  • determine whether an arrangement contains a lease
  • identify considerations with respect to substitution rights and decision-making rights
  • identify the criteria for the new finance lease and short-term leases
  • recognize the new recognition and measurement requirements for both lessees and lessors
  • identify the recognition criteria for sales-type, direct financing, and operating leases
  • identify the overall requirements with respect to lease modifications
  • identify the criteria used for sale and leaseback transactions
  • identify the considerations with respect to a lessee’s involvement in construction of a leased asset
  • identify the presentation requirements for both lessees and lessors
  • recognize both qualitative and quantitative disclosure requirements for both lessees and lessors
  • identify the effective date for the new lease accounting standards
  • identify the significant differences between ASC 842 and IFRS 16
  • recognize considerations of and alternatives provided to private companies

Designed For

CPAs, EAs, and other tax professionals
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