Transitioning to ASC 842: Why Robust Analytical Reporting Tools will be a must for all Entities
The new lease accounting standard ASC 842 is effective for public companies beginning January 1st, 2019. The primary purpose of the standard was to address the fact that most operating leases are deemed off balance sheet financing arrangements and currently are only disclosed via a company’s financial footnotes in the “Commitments and Contingencies” footnote.
Therefore, for every identified lease, companies will be required to create a lease liability calculated as the present value of the future fixed payments and a corresponding asset (“right of use” asset).
Why entities need analytical reporting for ASC 842:
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