Did you know that new capital lease accounting standards call for businesses to have new accounting processes in place by 2019 for public companies and 2020 for all other companies? The Financial Accounting Standards Board (FASB) has introduced some changes that will likely impact you. While 2019 may seem far away, it’s important for you to understand what is changing and exactly what that impact will be so you can prepare your business accordingly.
Capital leasing has long been an advantageous financial strategy for businesses to increase cash flow and optimize their equipment life-cycle. Historically, many of these leases have been recorded as operating leases, and have been excluded from the balance sheet. Under the new lease accounting standards, all leases with terms 12 months or longer will need to be recorded on your balance sheet at the net present value of the remaining lease payments as well as a corresponding liability.
It’s confusing, but we can help.
Now is the time to be proactive and plan for the future. Our finance team has been hard at work preparing customized solutions for our clients to aid in this transition and we’d love to help you get started. We put together this infographic to help you know what to expect.
CONFUSED WITH CAPTIAL LEASE ACCOUNTING? OUR TEAM IS READY TO HELP.
Partner with us and we will help you assess if you are in the RIGHT lease and if you are recording each lease properly. Click the Let’s Talk button to get started.
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