Olga Usvyatsky, Derryck Coleman and Guillermo Aznar-Muzas, Audit Analytics
The Financial Accounting Standards Board (FASB) issued a new lease accounting standard (ASC 842) in February 2016, but it didn’t come into effect until 2019 for companies with calendar year-ends. The new rule says companies must recognize lease assets and liabilities on their balance sheet. According to the FASB, the new standard should improve financial reporting of leasing transactions.
In this article, Audit Analytics takes a close look at why this change in accounting was required and how companies are planning to implement the new standard moving forward.