The Financial Accounting Standards Board ("FASB") has issued a new accounting standard for leases. This new standard—ASC Topic 842—replaces the existing ASC Topic 840, changes the accounting for operating leases (requiring capitalization in the financial statements), and upgrades many other lease accounting and reporting aspects. Private companies are required to implement the new standard effective for calendar 2022 year-end annual financial statements and 2023 interim financial statements.
Learning Objectives
• Relevant considerations regarding the implementation of the new standard in upcoming audits and review, particularly for privately-owned companies
• Evaluating whether leases have been recorded in conformity with the applicable financial reporting framework
• Auditing transition adjustments and disclosures
• Considering internal control over financial reporting
• Identifying and assessing fraud risks
• Evaluating whether the financial statements include the required disclosures regarding leasing transactions
• Determine the impact on ratios and financial relationships that will be impacted by the new standard
Major Topics
• Analysis of requirements for lease accounting under ASC 842, including detailed schedules showing journal entries and computations
• Analysis of internal control and fraud risk aspects
• Identification of high-risk areas of lease accounting and reporting
• Suggested audit and review procedures for identified risks
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