Also, below is a transcript of the podcast episode:
Jim Hunt: This is Jim Hunt hosting the next episode of Bramasol’s Insights to Action podcast series. Today we’re going to focus on another aspect of ASC 842 that applies to private companies. A lot of the focus in the past has been on public companies, but in 2020 it’s now becoming private companies turn in the barrel. We’re lucky to have John Scott with us today who has deep understanding of these issues and can really flesh out what private companies need to be doing. John is Senior Technical Accounting Adviser at Bramasol. He’s a proven leader. He’s been with Big Four accounting companies. He’s has CPA audit experience. He’s also been on the client side over the years. He’s successfully integrated new business change projects and he’s built accounting and audit teams. He’s also lived through many compliance projects. So John, thank you for being here today.
John Scott: Thanks so much Jim. I really appreciate it. As Jim mentioned, it’s really important for the private companies this year to tackle ASC 842. As you all know, it was pushed back on the implementation date from January 1st, 2020 now it’s going to be January 1st, 2021 so you’re going to need to implement the standards this year. So, the beginning point for a good standards implementation is the assessment phase. This needs to be a really well thought out, thorough assessment of the types of leases you have, such as operating, finance, etc. You also tackle things about thresholds, your processes, whether you want to go software implementation to handle your leases or just use spreadsheets. You also need to determine whether you’re a lessee and/or a lessor. Understanding the standard is really important so you need to do a thorough reading of it. And finally you need to find out where all your leases are and gather those up.