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Rachel Reed, Team Lead, Technical Accounting Consultant

The Art of Shrinking: Lease Adjustments in Real Estate Downsizing

Working from home began as a two week “temporary” experiment in March 2020 at the start of the COVID 19 pandemic. Over four years later, remote work has evolved into the new normal as companies and employees realize they can operate as efficiently, if not more...

SaaS Management Overview: Platforms, Operations, Spend & More Explained

1. What is SaaS Spend Management? 2. What is SaaS Operations Management? 3. What is SaaS License Management? 4. SaaS vs. managed services 5. What are SaaS management platforms (SMPs)? Which SaaS applications are being used? How are they being used? Who has access to...

CapEx vs. OpEx: Capital and Operating Expenses Explained

1. CapEx (Capital Expenditures) How is CapEx reported? 2. OpEx (Operating Expenses) How is OpEx reported? 3. Is software CapEx or OpEx? 4. CapEx vs OpEx: Which is better? 5. Summary 6. Related articlesEvery company has a variety of costs, from office leases to...

How to Replace Your Lease Accounting Solution

During many organizations’ initial implementation of the lease accounting standards, a software was selected to assist in crossing the finish line to compliance. If the selection of lease accounting software was frantic or last minute, you may not have had the...

How to Replace Excel as Your Lease Accounting Solution

For many accountants, when they hear “ASC 842”, “GASB 87”, or “lease accounting," they become anxious thinking back to a very stressful deadline-driven project with significant balance sheet implications. This might be because they implemented the new lease accounting...

Sale-Leaseback Transactions and Accounting under ASC 842 Explained

1. What is a sale-leaseback transaction? 2. Why enter into a sale-leaseback transaction? What are the benefits of a sale-leaseback transaction? What are the disadvantages of a sale-leaseback transaction? 3. Examples of sale leasebacks 4. Identifying a sale-leaseback...

SFFAS 54: FASAB Lease Accounting Explained with a Full Example

1. What is SFFAS 54? 2. Effective date 3. Lease definition What is a lease? Embedded leases 4. Scope Short-term lease exemption Lessee recognition Lessor recognition Discount rate 5. Example 6. SummaryWhat is SFFAS 54? SFFAS 54 is the new lease accounting standard...

How to Conduct an Inventory of Your Leases under GASB 87

1. Scoping your leases 2. Definition of a lease 3. Exemptions Short-term leases Materiality Leases that transfer ownership Other GASB 87 exemptions 4. Finding your leases Look at your requisition process Engage the right departments Consolidate your leases in one...

How to Conduct an Inventory of Your Leases

1. Scoping your leases Leases defined Exemptions 2. Finding your leases Look at your requisition process Engage the right departments 3. Consolidate your leases in one place Cross-check your template for accuracy and completeness 4. Summary 5. Related articlesThere’s...

Lease Modifications and Remeasurements under ASC 842

1. Lease modification types Modification of existing lease vs. new lease Modification to terminate all or part of the lease Modification vs. reassessment 2. Summary 3. Related articlesA lease modification is a change to the terms and conditions of a contract resulting...

Asset Retirement Obligation (ARO) Accounting Example for Real Estate

An asset retirement obligation (ARO) represents the legal commitment to remove certain improvements or modifications to an asset at the end of the asset’s use. The FASB’s ASC 410 Asset Retirement and Environmental Obligations (ASC 410) discusses accounting for AROs....

GASB 87 Disclosure Requirements for Lessees Explained with Examples

1. Qualitative disclosures 2. Quantitative disclosures Lease asset disclosure Lessee’s outflow of resources Lease liability disclosure and maturity analysis Future lease commitments Short-term leases: exempt Additional disclosures (if applicable) 3. Summary 4. Related...

Financial Statement Audits for Leases: Testing

1. Completeness and existence 2. Documentation of policies 3. Accuracy of calculations 4. Presentation 5. Summary 6. Related articlesThis is the third segment of an article targeted at private companies who have not yet adopted the lease accounting standard, as well...

Leasehold Improvements Accounting and Amortization under US GAAP

1. Common examples 2. Accounting for leasehold improvements Amortization of leasehold improvements Example of leasehold improvement amortization 3. Leasehold improvements and AROs 4. Bonus depreciation and tax considerations for qualified LHIs Qualified improvement...

Interest Rate Implicit in the Lease under IFRS 16 Explained

1. What is the implicit interest rate under IFRS 16? Implicit rate: ASC 842 vs. IFRS 16 2. Example: Calculate the interest rate implicit in a lease under IFRS 16 3. Summary 4. Related articlesWhat is the implicit interest rate under IFRS 16? The rate implicit in the...

Lease Liability Amortization Schedule: How to Calculate It in Excel

1. What is lease liability? 2. How to create the lease amortization schedule and calculate your lease liability Create five-column spreadsheet Enter the number of periods and cash payments Enter expense formula Fill expense column Enter liability reduction formula...