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Implementation of the New Lease Standard

  • ITEM SKU
    8305
  • CPE Hours
    10
  • Full Course Price
    $84.50
Exam Questions: 50
Course Level: Basic
Pages: 334 | Content: 396, Supplemental: 38
NASBA Area of Study: Accounting
Not Acceptable for: Enrolled Agents
Version: 8305

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 numerous other amendments), 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. This course also addresses newly issued ASU 2023-01, Leases (Topic 842 ) - Common Control Arrangements, addressing the application of the lease standard to common control arrangements. PLEASE NOTE: Not accepted for Enrolled Agents. All course material provided. No prerequisites. Course level: Basic.

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Purchase EXAM ONLY

Course Information

Table of Contents
  • Background
  • Basic Concepts of ASU 2016-02
  • Introduction
  • Definitions Used in ASU 2016-02
  • Scope and Scope Exceptions
  • Identifying a Lease
  • Lessee Rules
  • Lessor Rules
  • Transition and Effective Date Information
  • Leases: Sale and Leaseback Transactions
  • Leases: Leveraged Lease Arrangements
  • Impact of Changes to Lease Accounting
  • Impact of Lease Changes on Nonpublic Entities
  • Other Considerations - Dealing with Financial Covenants
  • Avoiding the New Lease Standard
Objectives
  • To recognize a key change made to GAAP by the new lease standard
  • To identify a type of lease that exists for a lessee under ASU 2016-02
  • To recall a type of lease for which the ASU 2016-02 rules do not apply
  • To recognize some of the criteria that determine whether a contract is or is not a lease
  • To identify some of the types of economic benefits a lessee can obtain from a leased asset
  • To recognize a right that ASU 2016-02 states does not prevent a lessee from having the right to direct use of an identified asset
  • To identify a threshold for a lease term to be considered a major part of an asset's remaining economic life
  • To recognize why an entity might not want to use the risk-free rate to compute the present value of lease payments
  • To identify how a lessee should account for initial direct costs
  • To recognize items that are and are not components of a lease term
  • To recall the method a lessee should use to record interest expense on a lease obligation
  • To identify types of leases for a lessor
  • To recognize the rate that a lessor should use in performing the 90% test for a direct financing lease
  • To recall how a lessor should initially account for initial direct costs for a lease in certain instances
  • To identify how a lessor should account for lease payments received on the income statement for an operating lease
  • To recall how a lessor should classify certain cash receipts on the statement of cash flows
  • To recognize how certain existing leases are accounted for on the implementation of ASU 2016-02
  • To identify how deferred income taxes will be treated for lessees under ASU 2016-02
  • To recall the potential impact that the new lease standard might have on a lessee's EBITDA and debt-equity ratios
  • To recall the IRS rules as to when an entity should and should not capitalize a lease for tax purposes

PLEASE NOTE: CPE credit measurement is based on NASBA Registry and QAS guidelines of one credit for every 50 minutes. Credit calculation may vary in different states — check with your State Board of Accountancy. Unless otherwise noted in the specific course description, no advanced preparation is required in order to register or complete any PES CPE course. Use of materials or services provided by Professional Education Services, LP ("PES") are governed by the Terms and Conditions stated on PES' website www.mypescpe.com. PES provides these courses with the understanding that it is not providing any accounting, legal, or other professional advice and assumes no liability whatsoever in connection with its use. PES has used diligent efforts to provide quality information and material to its customers, but does not warrant or guarantee the accuracy, timeliness, completeness, or currency of the information contained herein. Ultimately, the responsibility to comply with applicable legal requirements falls solely upon the individual licensee, not PES. PES encourages you to contact your state Board for the latest information and to confirm or clarify any questions or concerns you have regarding your duties or obligations as a licensed professional.