The new Lease accounting standard, ASC 842, took effect for many entities on December 15, 2021. This accounting standard was designed to bring leases onto the balance sheet and increase transparency and visibility into an organization's lease assets. There have been significant changes in how companies must account for leases in their financial statements.

While the intent of the joint project between the FASB and the IASB was to align the GAAP and International Financial Reporting Standards (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 lease accounting standards issued by the FASB in February of 2016 as well as modifications and implementation guidance. 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 and disclosure, and 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.

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