Accounting Standards Update (ASU) No. 2016-02, Leases (ASC 842) and GASB Statement No. 87 (GASB 87), change the financial reporting requirements of organizations that enter into leasing transactions or other contracts for assets such as real estate, vehicles and equipment. They will significantly affect organizations having arrangements that need to be accounted for under either of the new standards.
*In June 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-05, which provided an additional one-year delay in the effective date for nonpublic business entities.
Early adoption is permitted for all entities as of Feb. 25, 2016 (issuance date of final standard).
It’s important to connect with the people that need to be involved throughout the process and get their input on the effort they think your organization will need to expend.
Talk with your advisors and begin to understand the process and how your organization can successfully implement accounting and systems changes for long-term success with leases accounting.
Baker Tilly has developed a four-step methodology, tailored to your organization’s needs, to help you through the complex process of assessing impact, developing a plan and implementing that plan across your organization.
GASB update for public sector organizations