Dec 19, 2018   SOURCE: PR NewsWire

Accounting Academic/Former FASB Project Manager Discusses New Lease Accounting Standard in LeaseCrunch blog

MILWAUKEE, Dec. 19, 2018 /PRNewswire-PRWeb/ -- Using practical expedients, determining the lease term, assessing your discount rate, lease renewals and previously capitalized balances

John Hepp, retired Grant Thornton partner, former FASB project manager and current accounting faculty member at University of Illinois at Urbana-Champaign, discusses several nuances of the new lease accounting standard, from practical expedients ("the spoonful of sugar to help the medicine go down") to discount rates and much more, in a new LeaseCrunch blog posting. Topics covered: 

    --  Using practical expedients -- According to a LeaseCrunch survey, 60% of
        CPA firms find that most of their clients are electing the practical
        expedient package, yet 24% say problems have arisen related to which
        practical expedients should be applied. John shares that the practical
        expedients--though not perfect--certainly can reduce the amount of work
        needed in transitioning to the new standard.
    --  Determining the lease term -- Before determining and applying your
        interest rate, you must identify the lease term. FASB will allow, for
        transition purposes, to use a rate for either the original term of the
        lease OR the remaining term, as long as you are consistent throughout.
    --  Assessing your discount rate -- Once you determine whether you will go
        with the original lease term or the remaining term, you must identify
        your discount rate, and again, there are two options.
    --  Lease renewals -- John says that renewal terms should only be included
        if you can demonstrate that there is an economic reason you're compelled
        to stay, such as significant leasehold improvements or a termination
        penalty. Just because you intend to renew or cancel does not necessarily
        mean that you would include a renewal term.
    --  Previously capitalized balances -- John explains that "under the new
        model, there's really no such thing as prepaid rent." As for how to
        handle transitions for existing prepaid rent on the books, he offers
        recommendations.

To read the entire John Hepp blog, go to: https://www.leasecrunch.com/blog/ask-the-expert-john-hepp-discusses-the-new-lease-standard

LeaseCrunch is the only lease accounting software made by former CPA firm auditors for CPA firm auditors, with a development team made up of CPAs, former Big 4 public accounting auditors, accounting academics and a former FASB staff member.

For more information go to: http://www.LeaseCrunch.com

Press Contact:
John Vita
John Steven Vita Communications
John.vita(at)jsvcom.com
847/853-8283

SOURCE LeaseCrunch