Lease accounting

Adopting the new FASB lease accounting standard (ASC 842)

Adoption of the FASB’s lease accounting standard, ASU 2016-02, Leases (Topic 842), resulted in dramatic changes to the balance sheets of lessees. Lessees now recognize a right-of-use asset and a lease liability for virtually all of their leases. For income statement purposes, lessees are required to classify leases as either operating or financing, similar to today. Lessor accounting is generally similar to the current model.

In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which delayed the effective date to 2021 for those calendar year-end public not-for-profit entities that have not yet issued (or not yet made available) their financial statements and to 2022 for calendar year-end companies other than public business entities.

In April 2020, the FASB staff issued a Q&A that provides some elective relief to lessors and lessees in accounting for rent concessions related to COVID-19.

Our comprehensive accounting and reporting guide on lease accounting will help you with your company’s implementation.

Featured leases podcast series and video

Lease accounting podcast series

Do you have questions on leasing adoption, implementation and accounting? Listen to our lease accounting podcast series for top answers and insights.

Lessee financial statement disclosures

Need to get your head around leasing disclosures? Watch this video for disclosures from the Lessee’s point of view. Hear Marc Jerusalem discuss key disclosure considerations and more.

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Heather Horn

Heather Horn

US Strategic Thought Leader, National Professional Services Group, PwC US

Brandon Campbell Jr.

Brandon Campbell Jr.

Managing Director, PwC Deals Practice, PwC US

David Schmid

David Schmid

International Accounting Leader, National Professional Services Group, PwC US

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