Public companies have had to comply with Accounting Standards Codification (ASC) 842, Leases, since the beginning of 2019, and now that deadline is quickly approaching for private companies. After several delays, the Financial Accounting Standards Board (FASB) has confirmed that ASC 842 is set to be effective for periods beginning after December 15, 2021 for private companies.
We encourage you to read this article posted in the Journal of Accountancy on the FASB’s decision to decline extending the effective date for the adoption of the new leasing standard for nonpublic entities.
The adoption of a new standard can consume a significant amount of a company’s time and resources. Fortunately, private companies have the benefit of leveraging the experience gained from the implementation of the standard by public companies. If not already started, private companies need to ensure that there are effective processes and systems in place to identify, assess and maintain the complete population of their leasing information.
SLK’s Audit & Advisory professionals can assist your organization in navigating the challenges associated with the implementation of a significant new standard. Reach out to our firm to discuss how SLK can assist you.