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Lease Accounting

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A building during the night with text overlaid saying lease accounting

Lease Accounting

We work closely with both lessees and lessors to evaluate how your leasing arrangements and balance sheets will change under the new leasing standard.

A building during the night with text overlaid saying lease accounting

Lease Accounting

We work closely with both lessees and lessors to evaluate how your leasing arrangements and balance sheets will change under the new leasing standard.

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The lease accounting model is changing as a result of FASB Accounting Standards Update 2016-02, Leases (Topic 842), and the result could mean significant changes for your operations. Starting in 2019 (2021 for private companies), lessees will be required to recognize lease assets and liabilities on their balance sheet, which could affect everything from internal controls to debt covenants. Lessors may need to modify existing leasing arrangements and financial reporting processes. Our professionals make adopting the new leasing standard easier through our understanding of the accounting changes and of your unique circumstances. Knowing you and the changes in the lease accounting model inform our step-by-step approach to implementation, and provide you with the guidance and illustrative examples you can rely on to meet your new requirements.

Be in the Know About Leasing Changes

Our Understanding the Leasing Standard whitepaper takes a deep dive into what's changed from existing U.S. GAAP.

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Leasing Whitepaper Thumbnail

The deep dive we have taken into the new leasing standard, along with our knowledge of your unique situation,
helps make implementing leasing changes easier.

Insights

How to Ensure Estimated Discount Rates for Lease Liabilities Hit the Mark

The forthcoming lease accounting changes will require companies with leased assets to record a lease liability. For most lessees, the only option they will have to calculate their lease liability will be to estimate an incremental borrowing rate. Careful analysis is needed to estimate an incremental borrowing rate. The following factors should be part of that evaluation.

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The Challenge of Valuing a Deferred Revenue Liability - Part 1: Definition and Basic Valuation Principles

Advance payments happen every day, from subscription services to purchasing airfare or tickets to a sports game. For the companies accepting the advance payments, however, the deferred revenue liability that comes from those sales presents certain challenges, particularly if those companies were to undergo a business combination while holding the deferred revenue.

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How Professional Sports Stadiums Are Affected by the Leasing Standard

New professional sports stadium builds like the ones in Los Angeles, Las Vegas, and Dallas could look very different under the forthcoming changes to lease accounting. The following is a closer look at some of the implication the standard changes could have on professional sports teams and their local governments.

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  • 10 Questions Lessees Should be Asking About Their Leases

     Some companies will have a harder time making the changes in the new lease accounting standard than others. Reviewing these 10 questions may help illuminate lease features that may make adopting ASC Topic 842 more complicated for lessees.

  • How Professional Sports Stadiums Are Affected by the Leasing Standard

     New professional sports stadium builds like the ones in Los Angeles, Las Vegas, and Dallas could look very different under the forthcoming changes to lease accounting. The following is a closer look at some of the implication the standard changes could have on professional sports teams and their local governments.

  • The Challenge of Valuing a Deferred Revenue Liability - Part 1: Definition and Basic Valuation Principles

     Advance payments happen every day, from subscription services to purchasing airfare or tickets to a sports game. For the companies accepting the advance payments, however, the deferred revenue liability that comes from those sales presents certain challenges, particularly if those companies were to undergo a business combination while holding the deferred revenue.

  • How to Ensure Estimated Discount Rates for Lease Liabilities Hit the Mark

     The forthcoming lease accounting changes will require companies with leased assets to record a lease liability. For most lessees, the only option they will have to calculate their lease liability will be to estimate an incremental borrowing rate. Careful analysis is needed to estimate an incremental borrowing rate. The following factors should be part of that evaluation.

  • Select a Lease Accounting Software Solution That Works for You

     The challenge with the new lease accounting standard won’t end with the initial adoption. Tracking and monitoring lease data and modifications may mean that traditional approaches to lease management aren’t feasible anymore. Lease accounting software provides a solution, provided you know what to look for in your tool.

  • New Lease Accounting to be Delayed?

     Good news for private companies, nonprofits, and smaller public companies: the FASB is planning to delay the roll-out of its accounting updates to leasing, credit loss impairment standard, hedge accounting, and long-term insurance contracts. Discussions by board members also indicate the FASB may be leaning toward a new approach for future complex accounting standards.

  • Selecting the Right Lease Discount Rate for You

     Companies have options when it comes to the lease discount rate they use when applying the new leasing standard. Here's what to consider.

  • Second Quarter Webinars: A Deep Dive into the Leasing Standard and Important Tax Developments

     CBIZ and MHM’s 2019 Executive Education Series™ unpacks some of the major changes coming your way through webinar-based training.

  • Webinar: Oddities in Leasing: Don't Let These Provisions Be the Odd Thing Out of Your Implementation Plan

     Our free webinar will cover some of the specific considerations for the leasing standard, including build-to-suit and sale and leaseback arrangements as well as tax increment financing projects.

  • Webinar: How Not-for-Profit Organizations Can Prepare for the New Leasing Standard

     This webinar will cover the specific considerations for leasing standard adoption for the nonprofit sector and the steps organizations can be taking now to ensure a smooth transition.

  • Webinar: Invest Time in Inventorying and Other Leasing Implementation Tips

     In our free webinar, we will talk about the lease inventory process and other tips that can simplify implementation.

  • Lessors: Don’t Forget These 3 Simplifications for the Leasing Standard Adoption

     Late in 2018, the Financial Accounting Standards Board (FASB) released minor changes to lessor accounting designed to make adopting the new leasing standard easier.

  • 2019 Accounting Preview

     Public and private companies have plenty to work on in the interim. Both have significant accounting changes ahead of them in 2019. Getting a jump start on those updates may make year-end reporting significantly easier.

  • 4 Things Not-for-Profits Can Do in 2018 to Make Adopting the Leasing Standard Easier

     Now is the time for not-for-profit organizations to prepare for the implementation of the new leasing standard (ASC Topic 842).

  • Four Things Private Companies Can Do in 2018 to Make Adopting the Leasing Standard Easier

     The transition to the new leasing standard promises to be time-consuming, and it could have an impact on financial statements. Taking action early — before the effective date — can help private companies simplify their adoption process and potentially avoid compliance issues with loan covenants.

  • Five Things Public Companies Can Do in 2018 to Make Adopting the Leasing Standard Easier

     The time to adopt the new leasing standard is almost here for public companies. Changes introduced in ASC Topic 842 take effect for public companies for fiscal years beginning after Dec. 15, 2018. All leases will need to be evaluated in light of the new requirements and internal processes and reporting may need updating.

  • How Private Equity and Venture Capital Can Prepare for the Tax Impact of New Accounting Changes

     Private equity and venture capital firms and their portfolio companies need to be aware of the potential tax impact, as changes to financial reporting practices could create differences between book and tax accounting.

  • The Challenge with EBITDA

     The challenge with EBITDA is that the effect of upcoming accounting standards may make comparisons to prior periods difficult and could cause covenants and performance metrics to move to compliance or noncompliance.

  • Three Improvements Proposed to Lessor Accounting

     The FASB recently issued proposed guidance that would simplify three elements of the new leasing standard that will affect lessor accounting.

  • Webinar: Changes to Lessor Accounting under New Leasing Standard

     Lease accounting underwent a major revision with the issuance of ASU 2016-02, Leases (Topic 842). This course will specifically discuss the changes in lessor accounting.

  • Public Companies Catch a Break with Leasing Standard Update

     Changes to the adoption requirements will be particularly important for SEC filers as they prepare their third and fourth quarter filings.

  • Webinar: Adoption of New Leasing Standards

     This course discusses the changes and the challenges in implementation of the new leasing standard as well as the frequently asked questions of professionals concerning the changes.

  • Relief Coming for Leasing Standard Implementation

     Changes are coming that may make implementing the new leasing standard easier.

  • Do You Have a Debt Covenant Violation in Your Future?

     Two major accounting updates whose implementation are on the horizon and may have significant impacts to your balance sheet and bottom line relate to revenue recognition and leasing.

  • Your Leasing Questions Answered

     As entities work through their transition to the new guidance, a number of questions may come up. The following may assist with implementation.

  • Understanding the Leasing Standard: Five Considerations for Adoption

     Understanding the Leasing Standard: Five Considerations for Adoption takes a deep dive into what's changed from existing U.S. GAAP.

  • Understanding the Leasing Standard: Part 5 - Transitioning to the New Standard

     How leases are transitioned to the guidance under FASB ASU 2016-02, Leases (Topic 842) will depend on the types of leases in place at the date of adoption and whether electing available practical expedients makes sense for the organization.

  • Understanding the Leasing Standard: Part 4 - Sale and Leaseback and Other Types of Lease Transactions

     In addition to modifying the lessee and lessor accounting models, the new standard also introduces changes to the accounting model for sale-leaseback transactions, as well as other leasing concepts.

  • Understanding the Leasing Standard: Part 3 - Lessor Accounting

     In Part 3 of our Understanding the Leasing Standard serial, lessor accounting changes will be explored in more detail.

  • Four Repercussions of the New Leasing Standard

     Lessees in particular will need updating on several aspects of lease accounting. Implementing the standard may also affect debt covenant compliance, evaluation of leasing alternatives, accounting and finance departments and lease negotiations.

  • Understanding the Leasing Standard: Part 2 - Lessee Accounting

     Part 2 of our leasing serial takes a look into the changes to lessee accounting.

  • Understanding the Leasing Standard: Part 1 - Overview of the Key Concepts

     In part one, we will provide an overview of the major changes, a summary of lease classifications, definitions and recommendations for what your organization can do now to prepare for the new standard.

  • FASB Unveils New Leasing Standard

     Lease accounting received an accounting overhaul with the recent release of the FASB's Accounting Standards Update 2016-02 Leases (Topic 842).

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    Key Contact

    Heather Winiarski

     hwiniarski@cbiz.com (816) 945-5168

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    *MHM (Mayer Hoffman McCann P.C.) is an independent CPA firm that provides audit, review and other attest services. MHM works in an alternative practice structure with CBIZ, a leading business consulting, tax, and advisory services provider. MHM provides all attest services and, with limited exception, CBIZ provides all non-attest services.

    MHM. Knowing You.

    Contact Us

    About Us

    MHM (Mayer Hoffman McCann P.C.) is an independent CPA firm dedicated to learning about your organization and helping you meet your requirements and make informed decisions. We use our global resources and 60-plus years of experience serving growth-oriented public, private and not-for-profit organizations, to bring you best practices and sound guidance.

    A member of Kreston International |
    A global network of accounting firms

    Client Portal | Careers | Terms of Use | Privacy Policy

    Copyright 2018 Mayer Hoffman McCann P.C. All rights reserved.

    About Us

    MHM (Mayer Hoffman McCann P.C.) is an independent CPA firm dedicated to learning about your organization and helping you meet your requirements and make informed decisions. We use our global resources and 60-plus years of experience serving growth-oriented public, private and not-for-profit organizations, to bring you best practices and sound guidance.

    MHM. Knowing You.

    Contact Us

    A member of Kreston International |
    A global network of accounting firms

    Client Portal | Careers | Terms of Use | Privacy Policy

    Copyright 2018 Mayer Hoffman McCann P.C. All rights reserved.