Lease Accounting (ASC 842 and GASB 87)

Understanding the requirements of the new lease accounting standards can help you move forward with confidence.

Together we’ll create opportunities

CLA listens to you; we build a plan together to address your needs, and we bring that plan to life.

We’re committed to helping address what matters most to you:

  • Understanding and complying with the concepts in the new lease standard
  • Identifying how the standard may impact the recording and disclosure of leases in your financial statements
  • Adjusting processes and developing new procedures to capture data required to meet the new lease accounting standard
  • Training staff who may have to change their processes
  • Selecting and implementing a lease software tool
  • Assessing the organizational impacts beyond general accounting and financial reporting

Experience our client-focused approach

CLA’s experienced professionals can help you design and implement processes that will meet the requirements of the new lease accounting standards ASC 842 and GASB 87. After we develop a clear understanding of your environment, we’ll provide clear recommendations based on our industry experience, and help you develop a training and implementation plan.

Lease accounting (ASC 842 and GASB 87) services

Planning phase

We help management develop a high-level plan and establish a steering committee to provide project oversight.

Current state assessment phase

We develop an understanding of your lease environment, inventory your leases and help you consider the completeness of your lease population, and customize a detailed project plan specifically for you. We provide an overview of the guidance and develop a tailored training program for your designed staff.

Lease accounting software phase

We assist with the evaluation of various lease management tools and software for future accounting of the new lease standard. We also help with the configuration and testing of the selected software tool.

Lease analysis and implementation phase

In coordination with your staff, we analyze existing leases, service arrangements, and other contracts to help you determine if they meet the definition of a lease under the new standard. We help perform an embedded lease analysis, collect the required data, and document key attributes of your leases. We assist with drafting the technical accounting memo and required disclosures.

Functional area analysis and execution phase

In the final phase, we will work with your project team to understand how the new lease guidance might impact each functional area. We then provide training to help develop a functional area project plan.

We help you apply the lease guidance by recommending modifications to existing accounting and reporting processes, and then suggest changes to accounting policies.

Effective dates for the new lease accounting standards

Entities subject to ASC 842
Public business entities Annual reporting periods beginning after December 15, 2018, including interim reporting periods within that reporting period.
Public nonprofits (that have not yet issued financial statements) Annual reporting periods beginning after December 15, 2019, including interim reporting periods within those fiscal years.
Non-public entities Annual reporting periods beginning after December 15, 2021, and interim periods beginning after December 15, 2022.
All entities subject to GASB 87
Fiscal years beginning after June 15, 2021, and all reporting periods thereafter.

Early adoption is permitted.

Take steps to stay ahead
CLA offers three levels of service to find the right strategy for you.

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