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The new lease accounting standard for the public sector, Financial Accounting Standards Board No. 842, Leases (ASC 842), is intended to increase transparency and comparability among entities by requiring them to recognize most leases on the balance sheet and providing more disclosures and information about leasing arrangements.

Effective dates under the ASC 842 for entities are:

  • For public business entities, not-for-profit entities with conduit debt and certain employee benefit plans that file with the Securities and Exchange Commission: Apply ASC 842 for fiscal years beginning after Dec. 15, 2018 and the interim periods within that year.
  • For all other entities: Apply ASC 842 for fiscal years beginning after Dec. 15, 2019, and interim periods for years beginning after Dec. 15, 2020.
  • The FASB deferred the effective dates for other than public entities in 2019 and then deferred the effective dates again in 2020 via ASU 2020-05.  Currently, the ASC 842 effective dates for entities within the “other entities” category are applicable to fiscal years beginning after Dec. 15, 2021, and interim periods within fiscal years beginning after Dec. 15, 2022.
  • Early application if permitted for both groups of entities.

For more information on this topic, or to learn how Baker Tilly ASC 842 specialists can help, contact our team.

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