Accounting for the New Lease StandardCode: 21-LEASES

229 pages
Course description and objectives:

The purpose of this course is to review the changes made to lease accounting by ASU 2016-02, Leases, (as further amended by ASU 2018-01, Land Easement- Practical Expedient for Transition to Topic 842), and to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Topics include a review of the new rules for lessees and lessors, the types of leases, how to account for the balance sheet, income statement and cash flows statement impacts of different types of leases, the implementation requirements, and more.

Learning Objectives
After completing this course, you should be able to:

Recognize a key change made to GAAP by the new lease standard

Identify a type of lease that exists for a lessee under ASU 2016-02

Recall a type of lease for which the ASU 2016-02 rules do not apply

Recognize some of the criteria that determine whether a contract is or is not a lease

Identify some of the types of economic benefits a lessee can obtain from a leased asset

Recognize a right that ASU 2016-02 states does not prevent a lessee from having the right to

direct use of an identified asset

Identify a threshold for a lease term to be considered a major part of an asset’s remaining

economic life

Recognize who an entity might not want to use the risk-free rate to compute the present value of

lease payments

Identify how a lessee should account for initial direct costs

Recognize items that are and are not components of a lease term

Recall the method a lessee should use to record interest expense on a lease obligation

Identify types of leases for a lessor

Recognize the rate that a lessor should use in performing the 90% test for a direct financing lease

Recall how a lessor should initially account for initial direct costs for a lease in certain instances

Identify how a lessor should account for lease payments received on the income statement for an

operating lease

Recall how a lessor should classify certain cash receipts on the statement of cash flows

Recognize how certain existing leases are accounted for on the implementation date of ASU

2016-02

Identify how deferred income taxes will be treated for lessees under ASU 2016-02

Recall the potential impact that the new lease standard might have on a lessee’s EBITDA and

debt-equity ratios, and

Recall the IRS rules as when an entity should and should not capitalize a lease for tax purposes.

Presentation Method: QAS Self-Study

Category: Accounting

CPE credit: 8 Hours

Program Level: Update

Prerequisites: None

Advance Preparation: None

Exam expiration date: Participants must submit exams for grading within one year from the date of purchase