The FASB Officially Delays Deadline for Private Company Lease Accounting Standard Adoption
October 17 2019 - 02:24PM
Business Wire
CoStar Advises How Organizations Should Take
Advantage of Extra Time to Comply with ASC 842
The Financial Accounting Standards Board (FASB) officially voted
to approve delaying the effective date for a number of significant
accounting standards for private companies and nonprofit
organizations from December 15, 2019 to December 15, 2020. Included
in these proposed changes is Accounting Standards Update (ASU) No.
2016-02, Leases (2021 calendar year). This is a one-year deferral
of the effective date.
The delay comes on the heels of the FASB receiving a letter from
the AICPA Technical Issues Committee, requesting such a delay. FASB
took up the matter on July 17, 2019, allowing for public comment
over a 30-day period.
Private companies now have more time to prepare for the most
significant accounting change in 40 years. Industry experts at
CoStar Real Estate Manager recommend the time be put to good
use.
“Many public companies underestimated the time needed to gather
lease data and get it into a proven system that can handle the
complex calculations required to meet the new ASC 842 standard,”
said Matt Waters, CPA and director of lease accounting with CoStar.
“Even with the one-year delay, private companies should not slow
down their efforts to understand the requirements and get various
department stakeholders involved in the compliance project.”
A major challenge in implementing the new lease standard is the
amount of work needed to review lease contracts and identify what
qualifies as a lease. Many companies that have started this effort
are realizing there is much more work to do to capture all the
lease data than they initially believed. “This extra time will help
companies identify the entire population, especially embedded
leases in service contracts,” Waters said.
Additionally, CoStar Real Estate Manager recommends companies
evaluate lease accounting software proven to work for public
companies, most of which implemented solutions to meet the earlier
FASB compliance deadlines required for public companies. Such
solutions should ideally include comprehensive real estate and
equipment lease management functionality to optimize the business
value from the compliance-driven investments. “Private companies
should rely on the feedback and experience of their accounting
advisors and other private companies to quickly narrow down
software vendors who have proven functionality and additional
features to ensure a continuous flow of accounting processes,”
Waters added.
For more information and to download a whitepaper on Enterprise
Lease Accounting Lessons Learned, please visit
www.costarmanager.com.
About CoStar Group, Inc.
CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of
commercial real estate information, analytics and online
marketplaces. Founded in 1987, CoStar conducts expansive, ongoing
research to produce and maintain the largest and most comprehensive
database of commercial real estate information. Our suite of online
services enables clients to analyze, interpret and gain unmatched
insight on commercial property values, market conditions and
current availabilities. LoopNet is the most heavily trafficked
commercial real estate marketplace online with 5.8 million monthly
unique visitors. Realla is the UK’s most comprehensive commercial
property digital marketplace. Apartments.com, ApartmentFinder.com,
ForRent.com, ApartmentHomeLiving.com, Westside Rentals,
AFTER55.com, CorporateHousing.com, ForRentUniversity.com and
Apartamentos.com form the premier online apartment resource for
renters seeking great apartment homes and provide property managers
and owners a proven platform for marketing their properties. CoStar
Group’s websites attracted an average of over 52 million unique
monthly visitors in aggregate in the second quarter of 2019.
Headquartered in Washington, DC, CoStar maintains offices
throughout the U.S. and in Europe and Canada with a staff of over
3,900 worldwide, including the industry’s largest professional
research organization. For more information, visit
www.costargroup.com.
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Media Contact: Megan Sweat/Christine Dusome The Zimmerman Agency
(850) 668-2222 costarpr@zimmerman.com
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