Americorp Financial recommends educating your customers on the impact of the Financial Accounting Standards Board (FASB) new lease accounting rules, however, you also need to be careful when giving advice and information about these standards.
For those unfamiliar with the new lease accounting standards, the Equipment Leasing and Finance Association (ELFA) launched a white paper entitled, Navigating the New Lease Accounting Standard, to provide information and the impact of these rules on businesses.
Public companies will transition to the new lease accounting rules in 2019 in financial statements for periods beginning after December 15, 2018. According to the ELFA white paper, the U.S. Securities and Exchange Commission (SEC) requires three years of comparative income statements and two years comparative balance sheets. For public companies, 2017 is the starting year for capturing data for reporting in 2019. For private companies, the transition year is one year later, or 2020.
In a recent article in Accounting Today, 75% of companies are struggling with the new FASB lease accounting standard due to its complexity. Some of the biggest obstacles involve collecting the data, modifying business processes, project management, deploying software and performing the accounting. FASB also proposed an Accounting Standards Update designed to ease — and reduce costs associated with — implementation of its new accounting standard for leases.
As an ELFA member, Americorp Financial is sharing some of the lessee/customer tools authorized to share if you receive any questions from your customers about the lease accounting standards. However, we also recommend that you do not give specific advice as your clients should discuss with their tax/accounting professional as every situation is different.
Lease Accounting Educational Tools:
- FASB: Preparing for the Upcoming Leasing Standard: What a Lessee Needs to Know
- ELFA: 8 Steps to Ease the Transition to the New Lease Accounting Rules
- ELFA: FAQ: Answers to Some Frequently Asked Questions About Lease Accounting Changes for Lessees
- ELFA: Changes to Lessees’ Financial Statements Under the New Lease Accounting Standard
- ELFA: Quick Quiz: Test Your Lease Accounting I.Q.
- AccountingToday: Preparing for the new lease accounting standard
In the upcoming months, Americorp will continue to update our site with lease accounting tools and articles to help you educate your customers on these changes. If you have any specific questions, please contact firstname.lastname@example.org and we will provide feedback or resources to assist as best we can.