In this article, you'll learn:

• The impact of ASC 842 on lease accounting and company balance sheets.
• Ways to manage leases effectively and reduce costs.
• Importance of identifying all lease types, including embedded leases.
• How lease administration improves accounting and portfolio management.

Lease accounting standards are bound to change over time as regulatory bodies seek to identify potential issues and create solutions to them. However, these changes may prove to be disruptive for companies in the short term. Take, for example, the FAS 13 / ASC 842 lease accounting standard that went into effect for most publicly-traded companies at the beginning of 2019.
 
The process of moving their books over to the new method for lease accounting – which required most operating leases to be treated as on-balance sheet capital items – caught many CFOs unaware and turned out to be more complicated and time-consuming than many of them projected. The challenges came in three areas – accounting for the leases, finding every lease, and dealing with how the new reporting impacted perceptions of their companies.