FASB Lease Compliance
The latest FASB/IASB lease accounting standards went into effect at the end of 2018 for public companies, and went into effect in 2021 for both private companies and not-for-profit organizations. These changes affect how leased assets are reported in a company’s financial statements. Under the new rules, all leased assets, from office space to copiers, must be accounted for at an asset-level basis (except in very limited circumstances).
Lease Accounting Changes
Under the new standards, obligations for leases will now appear on the balance sheet as both assets and liabilities. While this is a financial reporting issue, compliance with the new standard requires obtaining information from multiple functions within an organization. In many cases, abstracting data from leases is needed to be able to prepare the requisite accounting calculations.
Lease Accounting Adoption
The initial adoption of the lease accounting standard often requires a concentrated effort executed by a diverse team from many different disciplines, including accounting, real estate, procurement, and many others.
Lease Accounting Compliance
Now is always the best time to think about ongoing lease accounting compliance.