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New Lease accounting rules
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If one has a significant lease portfolio, it makes sense to evaluate that portfolio as soon as possible to determine the impact of the changes and assess whether there is a need for a more advanced
It's essential that you determine to what extent your company's accounting for leases will be affected by the new rules. While FASB has made reporting less burdensome than what was in the initial draft, many companies will need to make changes to their processes and systems. Because of the way the rules are being implemented, companies that file their financial statements with the SEC are far better off beginning to phase in the process now rather than waiting for the rules to go into effect.
Complying with the news rules for Type B operating leases will be easy for US preparers. The P&L process remains the same as current GAAP, namely accrue the average rent and pay the actual rent. The balance sheet process is to record the present value of the remaining rents for all leases on each balance sheet date. This can be done easily using the information that lessees must keep to disclose future operating lease obligations in their footnotes under current GAAP. Assuming that info is kept on an