Description
The Financial Accounting Standards Board (FASB) has issued a new accounting standard for leases. This new standard-ASC Topic 842-replaces the existing ASC Topic 840, changes the accounting for operating leases (requiring capitalization in the financial statements), and upgrades many other lease accounting and reporting aspects.
Highlights
• Analysis of requirements for lease accounting under ASC 842, including detailed schedules showing journal entries and computations
• Analysis of internal control and fraud risk aspects
• Identification of high-risk areas of lease accounting and reporting
• Suggested audit and review procedures for identified risks
Objectives
• Relevant considerations regarding the implementation of the new standard in upcoming audits and review, particularly for privately-owned companies
• Evaluating whether leases have been recorded in conformity with the applicable financial reporting framework
• Auditing transition adjustments and disclosures
• Considering internal control over financial reporting
• Identifying and assessing fraud risks
• Evaluating whether the financial statements include the required disclosures regarding leasing transactions
• Determine the impact on ratios and financial relationships that will be impacted by the new standard
