Accounting For The New Lease Standard 2021 Mini Course

After reading the course material, you will be able to: • Recognize a key change made to GAAP by the new lease standard • Identify a type of lease that exists for a lessee under ASU 2016-02 • Recall a type of lease for which the ASU 2016-02 rules do not apply • Recognize some of the criteria that determine whether a contract is or is not a lease • Identify some of the types of economic benefits a lessee can obtain from a leased asset • Recognize a right that ASU 2016-02 states does not prevent a lessee from having the right to direct use of an identified asset • Identify a threshold for a lease term to be considered a major part of an asset’s remaining economic life • Recognize who an entity might not want to use the risk-free rate to compute the present value of lease payments • Identify how a lessee should account for initial direct costs • Recognize items that are and are not components of a lease term • Recall the method a lessee should use to record interest expense on a lease obligation • Identify types of leases for a lessor • Recognize the rate that a lessor should use in performing the 90% test for a direct financing lease • Recall how a lessor should initially account for initial direct costs for a lease in certain instances • Identify how a lessor should account for lease payments received on the income statement for an operating lease • Recall how a lessor should classify certain cash receipts on the statement of cash flows • Recognize how certain existing leases are accounted for on the implementation date of ASU 2016-02 • Identify how deferred income taxes will be treated for lessees under ASU 2016-02 • Recall the potential impact that the new lease standard might have on a lessee’s EBITDA and debt-equity ratios, and • Recall the IRS rules as when an entity should and should not capitalize a lease for tax purposes.