Ongoing lease accounting: 5 things you need to know

11/05/19

The new leases standard doesn’t end at adoption. Tune in as we describe the ongoing accounting considerations for the new leases standard.

As most calendar year public companies head into their first year-end close for the new leasing standard, we discuss some frequently asked questions around the ongoing accounting for operating leases. Listen as Suzanne Stephani and Marc Jerusalem, directors in our National office, join Heather Horn to take a closer look at some of the more common questions. Topics include:

1:01 - Lessee payments. We start with new leases and take a look at how to account for the payments that lessees make to get the asset ready for use.
4:54 - Lessor reimbursements. Next, we discuss common questions on how lessees account for reimbursement of those payments from the lessor.
10:59 - Ending a lease: termination accounting. Marc and Suzanne talk about what should companies be thinking about when a lessee is required to make a termination payment.
11:53 - Ending a lease: modification accounting. Some terminations are not so straight forward. Marc explains the accounting considerations for situations when a lessee continues to use the asset for a shortened period of time after the lease termination is agreed upon.
15:50 - The statement of cash flows. We wrap up by discussing how operating leases should be presented on the statement of cash flows.

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About our guests

Suzanne Stephani is a director in PwC’s National office with more than 20 years of experience assisting companies in resolving complex accounting issues. Suzanne specializes in the accounting for debt, preferred stock, leases and cash flows. Suzanne is also the lead producer and director of PwC's popular quarterly accounting and reporting developments webcast.

Marc Jerusalem is a director in PwC’s National office specializing in the new leasing standards (ASC 842 and IFRS 16). As a global leasing specialist, Marc consults with clients on complex lease accounting issues and is a contributor to many PwC National Office publications, including the Leases accounting guide.

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.