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| Author : | Jae K. Shim, Ph.D., CPA |
| Course Length : | Pages: 83 ||| Review Questions: 30 ||| Final Exam Questions: 35 |
| CPE Credits : | 7.0 |
| IRS Credits : | 0 |
| Price : | $62.95 |
| Passing Score : | 70% |
| Course Type: | NASBA QAS - Text - Technical - NASBA Registry |
| Primary Subject-Field Of Study: | Accounting - Accounting for Course Id 1476 |
| Description : | Historically, lease accounting has been straightforward: a capital lease vs. an operating lease. An operating lease is treated as an off-balance sheet operating expense. The FASB issued ASU 2016-02, Leases (ASC 842) in response to the growing need for transparency and comparability among organizations. The basic concept of ASC 842 is that leases of all types convey the right to direct the use and obtain substantially all the economic benefit of an identified asset, creating an asset and liability for lessees. Thus, the most significant change requires lessees to recognize the rights and obligations resulting from all leases (greater than 12 months) as assets and liabilities on their balance sheets. Although the lessor accounting is largely unchanged from ASC 840, there are some important changes and more disclosure requirements. For example, certain principles of the lessor model are updated to align with changes to the lessee model and the revenue recognition standard (ASC 606). As a result, ASC 842 brings additional scrutiny from enterprise leaders, auditors, and regulators. This course is designed to help you navigate the complexities of this standard. It explains financial accounting and reporting requirements for lessees and lessors with specific examples to illustrate the application. It also includes public business entities’ reporting responsibilities and explains how ASC 842 affects a company’s financial results. Finally, it shares insights that help companies develop a reasonable leasing policy threshold, maintain effective internal control over leases, and prepare for audits. |
| Usage Rank : | 0 |
| Release : | 2022 |
| Version : | 1.0 |
| Prerequisites : | General Accounting. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
What Is a Lease?
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 05-Feb-2023 |
| NASBA Course Declaration : | Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam. |
| Approved Audience : | NASBA QAS - Text - Technical - NASBA Registry - 1476 |
| Keywords : | Accounting, Accounting, Leases, Guidelines, New, Standard, ASU, 2016-02, cpe, cpa, online course |
| Learning Objectives : |
2. Cite the key changes in the leasing practice 3. Identify the applicability of the lease standard 4. Identify key concepts in lease accounting 5. Recognize the difference between U.S. GAAP and IFRS affecting the lease accounting practice 6. Identify the accounting rules for initial direct costs 7. Recognize the methods of accounting for different types of leases by lessees and lessors 8. Identify risks and controls over leasing activities |
| Course Contents : | Part I. Fundamentals of Lease Accounting Overview of Lease Standard Background Improvements Major Changes Applicability Summary of Key Amendments Transition Principles for Private Entities Effective Date Transition Elections Transition Approach Other Matters Comparison of U.S. GAAP and IFRS Standard Similarities Significant Differences Section 1 Review Questions Core Principles of Lease Accounting Definition of a Lease Lease Classification Lease Accounting Accounting Policy Elections Disclosures Rent Concessions Guidance Due to COVID-19 Pandemic Section 2 Review Questions Part II: The Application of the Lease Standard General Rules Identification of a Lease Separation of Lease and Nonlease Components Lease Commencement Date Initial Recognition and Measurement Subsequent Measurement Section 3 Review Questions Lessee Model Measurement of the Consideration Lease Classification Initial Recognition and Measurement Subsequent Measurement Lease Modifications Presentation Disclosures Section 4 Review Questions Lessor Model Measurement of the Consideration in the Contract Lease Classification Initial Recognition and Measurement Subsequent Measurement Lease Modifications Presentation Disclosures Section 5 Review Questions Sale and Leaseback Transactions General Rules Lessee Involvement in the Construction or Design Recognition Initial Measurement Section 6 Review Questions Part III. Other Lease Matters Practical Considerations for Lease Accounting Recognition (Capitalization) Thresholds Assumptions and Judgments Lease Administration System Financial Performance Real Estate Industry Lease Processes and Controls SOX Compliance Entity-Level Controls Risks and Controls over Leasing Activities Audit Readiness Section 7 Review Question Glossary |
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