Lessee Accounting: Identification, Classification and Recognition (Course Id 2018)

• Who is this course for?
  This 1‑credit NASBA QAS text self‑study course is intended for CPAs, accounting professionals, controllers, and financial statement preparers who need knowledge of lessee lease accounting under ASC 842.

• What is this course about or what problem does this course solve?
  It provides an overview of lease accounting from a lessee’s perspective—examining how to identify whether a contract is a lease, how to classify operating vs. finance leases, and how to recognize and measure lease assets and liabilities—addressing the implementation challenges of ASC 842.

• How can the knowledge from this course be used?
  Learners can determine if an arrangement contains a lease, evaluate substitution and decision-making rights, apply classification criteria, and properly recognize operating or finance lease liabilities and right-of-use assets in financial reporting.

• Why is this course important to a CPA, Accountant, or IRS Enrolled Agent?
  Understanding lessee accounting under ASC 842 is essential for compliance, ensuring accurate balance sheet presentation, correct expense recognition, and proper footnote disclosures—especially under the new lease accounting regime.

• When is this course relevant or timely?
  Released in 2022 (revision March 2024), the course remains highly relevant as ASC 842 continues to govern U.S. GAAP lease accounting since its effective dates (2019 for public entities and 2022 for private entities).

• How is a course like this consumed or used?
  Delivered as a NASBA‑approved text self‑study course, it includes review questions and a final exam (70% passing score); credits are granted upon successful completion—typically within one year of purchase—via the CPE provider platform.

This course provides an overview of the accounting for lease transactions, specifically from the standpoint of a lessee.  This includes a discussion of how to determine if an arrangement/contract is a lease, how to classify the identified lease (e.g., operating vs. finance) , as well as how to recognize and measure the various components of the lease.

NASBA QAS - Text - NASBA Registry - 2018

Course Learning Objectives

• Determine whether an arrangement contains a lease
• Recognize considerations with respect to substitution rights and decision-making rights
• Identify the criteria for lease classification
• List the recognition requirements related to operating and finance leases

Chapter 1 - Lessee Accounting: Identification, Classification and Recognition

Course Learning Objectives

Course Overview

Introduction

Part I - Identification

Do I Even Have a Lease?

Has an Asset Been Identified in the Contract?

What About Substitution Rights?

Review Questions

Right to Substantially All of the Economic Benefits

Right to Control Use of the Asset

Evaluation of Decision-Making Rights

What About Short-Term Leases?

Examples from ASC 842 – Determining Whether a Contract Contains a Lease

Part II - Classification

Introduction

Classification as a Finance Lease

Classification as an Operating Lease

Review Questions

Part III - Recognition

Subsequent Measurement

Illustrative Example – Lessee Accounting

Review Questions

Glossary