Lease Accounting under ASC 842 · • The discount rate is the rate implicit in the lease, or ... • If a lease renewal exists that extends the lease beyond 12 months, but is not

Lease Accounting under ASC 842Neil MacDonald CPA CMA PMPSolutions ConsultantBinary Stream Software Inc

IntroductionNeil MacDonald CPA, CMA, PMP

• 30+ years progressive Business, Project and IT Management, formal management and financial training, technical and industry certifications

• Project management and technical leadership in the delivery of IT and ERP implementations

• Resolution and consulting skills in applying best practices and efficiency initiatives

• Career History:• Solutions Consultant 2011 – Present• Dynamics GP Consultant 2007 – 2011• Mgr. IT and Process Improvements 1993 – 2007

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DisclaimerLease Accounting under ASC 842

• ASC 842 is new. It is extensive. The guidance from FASB runs close to 200 pages…long, detailed pages

• This webinar will only cover the high level points to get you started on ASC 842. It is in no way intended to be comprehensive, and due to the ever changing updates from FASB, is not meant to be a conclusive coverage of ASC 842

• While I am a CPA CMA (Chartered Professional Accountant / Certified Management Accountant), I am not a life-long expert in leasing

• I am also not YOUR CPA• It is your responsibility to learn as much about ASC 842 as you can, from various

resources, accounting white papers and articles, as well as the relevant IASB or IFRS topics and discuss these with your own CPAs and auditors to ensure you are compliant

Session agendaLease Accounting under ASC 842

• Why are we here? – Goals / objectives of this webinar• What is ASC 842?• Identifying and classifying your leases• Lessee accounting – creating Right of Use assets / lease liabilities• Lease vs Non-Lease components & direct vs indirect costs• Steps to prepare for ASC 842 adoption• How can I be ASC 842 compliant with my leases in Dynamics GP?• Q&A – but feel free to ask questions any time!

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Goals / ObjectivesLease Accounting under ASC 842

• Understanding ASC 842• Allow you to recognize if this applies to you, whether lessee or

lessor• Help you plan for ASC 842 adoption – what do you need to know

and consider?• Understand what some of the industry experts and accounting

firms are recommending• Discuss how to handle ASC 842 in Dynamics GP

ASC 842• “ASC 842 is new and comprehensive; I

don’t really understand it!”• “I don’t have time to read ASC 842”• “I have lots of leases”• “Implementation time is too close!”• “My ERP may not handle ASC 842

automatically”

Challenges

ASC 842– Leasesaka ASU 2016-02, IFRS 16

Acknowledgement is given to the following resources used to compile this presentation:• New Developments Summary – FASB issues new lease accounting standard – Grant Thornton• 10 Minutes on the new US lease standard – PwC• Executive Accounting Update – Lessees – KPMG• Executive Accounting Update – Lessors - KPMG • Leases – (Topic 842) - FASB

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What is ASC 842?• Updated FASB accounting standard; replaces ASC 840 • IFRS updated as well (IFRS 16), but not identical• Changes lease accounting for both lessors and lessees

• Lessor changes are minimal – mainly lease classification• Lessee changes are significant, so we will focus on those

• Key points:• Lessors focus on control of the asset to determine lease type;

most accounting remains similar to today’s standard• Lessees will show all leases longer than 12 months on the

balance sheet, with a “right of use” asset and a corresponding liability / investment

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Do I need to care about ASC 842?

Who is affected by ASC 842?

• “Topic 842 affects any entity that enters into a lease (as that term is defined in this update), with some specified scope exemptions.”

• If your company leases – as the lessor or the lessee - real property, land, computers, copiers, vehicles, trade marks etc…ASC 842 applies to you!

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ASC 842 timing• When does ASC 842 go into effect?• For public companies and some NFPs: as of fiscal periods

beginning after Dec 15, 2018; option to adopt 1 year early• Applies to NFPs that have issued, or are conduit bond obligators

for, securities that are traded, listed or quoted on an exchange or OTC markets

• For private companies and all other NFPs• As of fiscal periods beginning after Dec 15, 2019• Option to adopt two years early

• Early adoption may make sense for lessors because the changes are fewer, and while implementing ASC 606

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TransitionModified Retrospective Transition

• Requires adjusting the accounting for any leases existing at the beginning of the earliest comparative period

• Typically means 2 years of retrospective adjustment (for publicly traded companies, 2019 implementation requires 2018 and 2017 comparative financials)

• Leases that expire before the implementation date will not require adjusting

• For some firms, due to the extent of their leasing activities, this might be very difficult and time consuming

• Many examples provided to guide both lessors and lessees: See 842-10-55-243 through 254

• Section 842-10-65-1 has several pages covering “practical expedients” with illustrations

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Transition – BREAKING NEWS!Cumulative Update – ASU 2018-11, Leases – (ASC 842) Targeted Improvements - Released August 2018

• Allows users to apply ASC 842 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption

• Entities that elect this method should report comparative periods in accordance with ASC 840

• Lessors may also elect a practical expedient allowing them to not separate lease and non-lease components, by asset class.

• There are limitations to this election so read ASU 2018-11 to ensure it applies to you.

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Identify Your Leases

Identify your leases• Section 842-10-55-1

contains a flowchart to help determine whether a contract is or contains a lease.

• Note that “the flow chart does not include all the guidance on identifying a lease in this subtopic and is not intended as a substitute for the guidance on identifying a lease in this subtopic.”

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Lease, or no lease?A coffee company (customer) enters into a contract with an airport operator (supplier) to use space for it’s kiosk for a three year period.Contract specifies size of space, but not location. In fact, the supplier can dictate that the kiosk be moved at its discretion. There are minimal costs to supplier to move the customer.Customer owns the kiosk, and there are many areas in the airport where the customer might be located and/or relocated.

Lease or no lease?

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Lease, or no lease?A utility company (customer) enters into a contract to purchase all the electricity produced by supplier’s solar farm for 20 years. The solar farm is listed in the contract and the supplier cannot substitute it; the solar power cannot come from another facility. Customer designed the solar farm, hiring experts to determine the best location and engineer the equipment. Supplier built to customer’s specs and must maintain the farm. Supplier receives tax credits relating to construction and ownership, customer receives renewable energy credits that accrue from use of solar farm. Lease or no lease?

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Lease, or no lease?A utility company (customer) enters into a contract to purchase all the electricity produced by supplier’s explicitly stated plant for 3 years. The supplier owns, maintains and operates the plant and cannot substitute it. The contract sets out the quantity and timing of the power produced. Supplier designed the power plant and built it prior to entering into contract with customer.

Lease or no lease?

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Lease, or no lease?Customer enters into a contract with a telecom company (supplier) for network services for 2 years. Contract requires supplier to meet a specified quality level. Supplier installs, configures and operates servers on customer’s premises. Supplier determines speed and quality of data transport. Supplier can reconfigure the servers/network to meet service level.

Lease or no lease?

No lease! (842-10-55-124 through 126)Contract is a service contract, with no identified asset, wherein the supplier uses equipment to meet a service level.Customer does not control the servers; level of service is specified and cannot be changed without a new/modified contract. Even though customer creates the traffic, that does not change the configuration of the network, and does not affect how and for what purpose the servers are used. Supplier makes decisions over how servers are configured and used.

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Lease, or no lease?Customer enters into a contract with a telecom company (supplier) for use of a specific server for 3 years. Supplier installs, configures and maintains server on customer’s premises. Supplier substitutes server only in the event of a malfunction. Customer decides what data is stored on the server and how it fits into its server farm; customer can change these decisions at any time during the contract.Lease or no lease?

Lease! (842-10-55-127 through 130)There is an identified asset, which customer has the right to use and control for three years.Customer has the right to change the use of the server; supplier does not. Customer has the right to obtain all economic benefits from use of the server; customer also has exclusive use of the server.Customer has the right to direct the use of the server and change that at any time, without consulting the supplier.

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Identify your leases (continued)Lease classifications

• Lessees will need to distinguish between “operating” and “financing” (formerly capital) leases

• Lessors will need to distinguish between sales-type, direct financing and operating leases

• Since virtually all leases will now appear on the balance sheet, these lease types affect how lessees and lessors recognize expense / revenue on the P&L

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• Under ASC 842, a lease is a financing lease for a lessee, and a sales-type lease for a lessor if the lessee obtains effective control of the asset.

• What determines effective control? If any of the following are met (842-10-25-2):• The lease transfers ownership of the asset to the lessee at the end of the lease• The lease has a bargain purchase option• The lease term is for the major part of the remaining economic life of the asset

• This can be ignored if the lease begins at or near the end of the asset’s useful life• The present value of the lease payments, plus the guaranteed residual, amounts to substantially all of

the leased asset’s fair value• The asset is specialized and has no alternative use to the lessor

• Absent any of these conditions, the lease is treated as an operating lease.

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• What thresholds are used to determine “substantially all of the fair value” or the “major part of the remaining economic life”?

• ASC 842-10-55-2 uses these thresholds:• 75% or more is a major part of an asset’s remaining economic life• 90% or more is substantially all of an asset’s fair value• An asset is near the end of its economic life when 25% or less of its

economic life remains• What about the rate used to compute present values?

• The discount rate is the rate implicit in the lease, or• The lessees incremental borrowing rate

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Lessee accountingLet’s go deeper…

Lessee accounting• If a lease is less than 12 months, and does not contain a purchase option that is

reasonably expected to be exercised, a lease does not have to appear on the balance sheet, i.e. treat as an operating lease under ASC 840 (Short-term Election)

• If a lease renewal exists that extends the lease beyond 12 months, but is not expected to be exercised, the same treatment applies

• For the remaining leases, both a Right of Use (RoU) asset and a lease liability will be placed on the balance sheet

• Both the RoU asset and the liability will generally be recognized at the present value of the remaining lease payments

• Initial direct costs will also be capitalized as part of the RoU asset

• Operating leases – payments will be recognized as rental expense on a straight-line basis over the lease term

• Finance Leases – rental expense and interest expense will be recognized based on the interest rate, and the RoU asset will be amortized straight-line over the shorter of its useful life or the lease term

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Implementing a leaseCreate a Right of Use Asset

For each lease charge, calculate the Net Present Value for the sum of the flow of payments and the charge’s residual value

Discount Rate 5.51%Lease Payments:

100,000 Base rent at the end of year 1110,000 Base rent at the end of year 2125,000 Base rent at the end of year 3

NPV = 100,000/(1+0.0551) ^1 + 110,000 /(1+0.0551) ^2 + 125,000 /(1+0.0551) ^3 = 94,778 + 98,811 +106,421 = 300,000

Right of Use Asset CreatedRoU Asset $300,000Lease Liability $300,000

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Implementing a lease (continued)Finance lease Calculate Amortization Expense – based on NPV of pmts

Amortization Expense (Finance Lease) = 300,000 / 3 = 100,000

Calculate Interest ExpenseYear 1 Interest Component: 300,000 x 5.51% = 16,535

Year 2 Interest Component: (300,000 – 100,000 + 16,535) x 5.51% = 11,935

Year 3 Interest Component: (300,000 – 100,000 - 110,000 + 16,535 + 11,935) x 5.51% = 6,530

1st year invoice

Interest Expense 16,535 1st year Interest Component

Lease Liability 16,535 1st year Interest Component

Amortization Expense 100,000 Amortization expense from the RoUAsset calculation

RoU Asset 100,000 Amortization expense from the RoUAsset calculation

Lease Liability 100,000 1st year payment

AP 100,000 1st year payment28






2nd year invoice

Interest Expense 11,935 2nd year Interest Component

Lease Liability 11,935 2nd year Interest Component



Lease Liability 110,000 2nd year payment

AP 110,000 2nd year payment29






3rd year invoice

Interest Expense 6,530 3rd year Interest Component

Lease Liability 6,530 3rd year Interest Component



Lease Liability 125,000 3rd year payment

AP 125,000 3rd year payment30

Implementing a lease (continued)Operating lease

• Calculate Straight-line Amount i.e. Lease Expense from RoU(100,000 + 110,000 + 125,000)/3 = 111,667

• Calculate Interest ExpenseYear 1 Interest Component: 300,000 x 5.51% = 16,535Year 2 Interest Component: (300,000 – 100,000 + 16,535) x 5.51% = 11,935Year 3 Interest Component: (300,000 – 100,000 - 110,000 + 16,535 + 11,935) x 5.51% = 6,530

• Calculate Amortization ComponentYear 1 Amortization Component: 111,667 – 16,535 = 95,132Year 2 Amortization Component: 111,667 – 11,935 = 99,732Year 3 Amortization Component: 111,667 – 6,530 = 105,137

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Implementing a lease (continued)Operating lease

1st year invoice:

Lease Expense 111,667 Lease Expense from the RoU Asset calculation

Lease Liability 16,535 1st year Interest Component

RoU Asset 95,132 1st year Amortization Component

Lease Liability 100,000 1st year payment

AP 100,000 1st year payment

2nd year invoice:

Lease Expense 111,667 Lease Expense from the RoU Asset calculation

Lease Liability 11,935 2nd year Interest Component

RoU Asset 99,732 2nd year Amortization Component

Lease Liability 110,000 2nd year payment

AP 110,000 2nd year payment

3rd year invoice:

Lease Expense 111,667 Lease Expense

Lease Liability 6,530 3rd year Interest Component

RoU Asset 105,137 3rd year Amortization Component

Lease Liability 125,000 3rd year payment

AP 125,000 3rd year payment32

And that is the easy part!!!

Q. What happens if the lease is based on variable components, for example the escalation is based on CPI?

Q. What if a lease is modified or terminated early?

Typically, the RoU Asset and Lease Liability need to be restated and the difference goes to a gain or loss account

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Lease vs non-lease components & direct costs

Lease / Non-lease componentsAffects both lessees and lessors

Lessees• Need to evaluate services, allocate consideration to each component

• Example: a lease might contain property taxes, and maintenance (CAM). Taxes have no identifiable benefit to the lessee, so can be included in the ROU asset. CAM is a separately identifiable benefit, so is not part of the ROU asset.

• Base value of non-lease components on their relative stand-alone prices. If indeterminable, might need to ask the lessor.

• There is a practical expedient that allows, by asset class, for lease and non-lease components to be accounted for together as a single lease component

• Be careful! If significant, this can dramatically increase the amounts shown on the balance sheet, which might change some financial ratios

• Basis for Conclusions, paragraph BC14-c, states: "Topic 842 characterizes operating lease liabilities as operating liabilities, rather than debt. Consequently, those amounts may not affect certain financial ratios that often are used in debt covenants."

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Lease / Non-lease componentsAffects both lessees and lessors

Lessors• Need to evaluate services, allocate consideration to each

component• Example: a lease might contain property taxes, and maintenance (CAM). Taxes

have no identifiable benefit to the lessee, thus are part of the lease entries & investment. CAM is a separately identifiable benefit, so is not part of the lease investment.

• Base the value of non-lease components on their relative stand-alone prices. • Treat revenue from non-lease components under the guidance of ASC 606 –

Revenue from Contracts with Customers

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Direct vs Indirect CostsASC 842 changes the definition of “initial direct costs”

• 842-10-30-10: “Costs to negotiate or arrange a lease that would have been incurred regardless of whether the lease was obtained, such as fixed employee salaries, are not initial direct costs.”

• Example of costs allowed (842-10-30-9)• Commissions • Payments made to an existing tenant to incentivize that tenant to terminate its lease

• Example of costs not allowed (842-10-30-10)• General overhead, including depreciation, occupancy and equipment costs, unsuccessful origination

time or idle time• Costs related to activities performed by the lessor for advertising, soliciting potential tenants,

servicing existing leases• Costs related to activities that occur before the lease is obtained, such as obtaining tax or legal

advice, negotiating lease terms or conditions, or evaluating a potential lessee’s financial condition

• Expensing these latter costs could result in higher expense recognition prior to the lease, as well as higher margins on lease income 37

What the experts are sayingPwC – “10 Minutes on The New Lease Standard”

What Do I Do?• With the changes to both ASC 842 – Leases, and ASC 606 – Revenue from

Contracts with Customers, coming so close together, and the obvious link for Lessors, how do I manage adopting both?

• The PwC document referenced early suggests you consider these things:• Since the standards are so closely aligned, especially for lessors, adopting both concurrently might make sense.

This means early adoption of 842 since 606 is applicable in 2018.• Are your systems and controls ready for early adoption?• What are your peers/competitors doing? Will you be the only one to not adopt early?• What do your investors prefer? One big change (606 & 842), or one per year (606 in 2018, 842 in 2019)?• The interest rate environment…do you adopt early using today’s interest rate, or wait and use 2019’s? • The expedients allow you to hold off certain leases until restructuring or changing leases is required. Should you

wait, or do it now?• Reporting requirements: both GAAP and IFRS, or just one (the standards are not identical)

• There are no correct (or wrong) answers, except the ones that are right for your business!

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Steps to preparePwC – 10 Minutes on the New Lease Standard

The same PwC document contains six steps to help you prepare:1.Get every resource on board – every department in your organization might

be impacted, from IT to tax, to procurement, to operations, to treasury and investor relations. Ensure you budget both cost and resources

2. “Break into the filing cabinets” – inspect and understand your leases, lease terms, renewal options and payments. Examine each lease, or class of lease. Be prepared in multi-asset leases to identify and account for each component as a separate lease. Understand lease and non-lease elements.

3.Assess the impact – Do the practical expedients make more sense for your business? Estimate future balance sheet amounts for operating leases. Evaluate your leasing strategy, i.e lease vs buy, short vs long term

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Steps to preparePwC – 10 Minutes on the New Lease Standard

The same PwC document contains six steps to help you prepare:4. Examine and understand regulatory and tax implications5. Manage the transition – do you need to redesign or invest in new systems?

Don’t forget that testing and implementation take time, so start early6. Reassess agreements – plan to periodically re-evaluate lease terms.

“Ongoing compliance costs are likely to be higher than today”

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Managing leases in Dynamics GP

What does that mean for my Dynamics ERP?Managing leases in your MS Dynamics GP ERP requires either

• Massive, complex Excel spreadsheets; build and track RoU assets & investments and manually JE each period

• Excel is useful, but cumbersome. (A recent report from the EU found over 50% of all critical spreadsheets in large organizations contained “material defects”!*)

• *http://www.eusprig.org/basic-research.htm - European Spreadsheet Risks Interest Group

• A third party, non-integrated property lease solution• http://www.capterra.com/lease-management-software/ - has over 50 different packages

• What is the upgrade path?• Reporting capability?• How does it update your GL? • Most require manual or integrated JEs to ensure GL is up to date – but how up to date?

• ISV solution – Talk to your Dynamics VAR for recommendations• Ask your peers on the GPUG Forum what they are doing

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http://www.eusprig.org/basic-research.htmhttp://www.capterra.com/lease-management-software/Finance lease

Lease STORE00001Start Date1/1/18

Term 2 yearsEnd Date12/1/19

Discount Rate:10.000%

ChargeFrequencyAmountEscalLease Comp

RentMonthly1,0002% in year 2yesPayment In Advance (Annuity Due)Payment End of Month:

NPV:22,059.0921,876.78

Amortization Expense:919.13951.16

Payment AmountROU Asset Payment AmountPresent ValueROU Asset Carrying AmtInterest ComponentAmortization ExpenseLease Liability BalanceROU Asset Balancelease commencement date:

1,000.0001/1/181,000.001,000.0022,059.09- 0919.1321,059.0921,139.96Journal Entry:

1,000.0012/1/181,000.00991.7421,059.09175.49919.1320,234.5820,220.831-Jan-18

1,000.0023/1/181,000.00983.5420,234.58168.62919.1319,403.2019,301.70ROU Asset22,059.09

1,000.0034/1/181,000.00975.4119,403.20161.69919.1318,564.9018,382.57Lease Liability22,059.09

1,000.0045/1/181,000.00967.3518,564.90154.71919.1317,719.6017,463.44

1,000.0056/1/181,000.00959.3617,719.60147.66919.1316,867.2716,544.32

1,000.0067/1/181,000.00951.4316,867.27140.56919.1316,007.8315,625.19Invoice January

1,000.0078/1/181,000.00943.5616,007.83133.40919.1315,141.2314,706.06Jan-18

1,000.0089/1/181,000.00935.7715,141.23126.18919.1314,267.4013,786.93Interest Expense- 0JE

1,000.00910/1/181,000.00928.0314,267.40118.90919.1313,386.3012,867.80Lease Liability- 0JE

1,000.001011/1/181,000.00920.3613,386.30111.55919.1312,497.8511,948.67Amortization Expense919.13JE

1,000.001112/1/181,000.00912.7612,497.85104.15919.1311,602.0011,029.54ROU Asset919.13JE

1,020.00121/1/191,020.00923.3211,602.0096.68919.1310,678.6810,110.42Lease Liability1,000.00POP

1,020.00132/1/191,020.00915.6910,678.6888.99919.139,747.679,191.29AP1,000.00POP

1,020.00143/1/191,020.00908.129,747.6781.23919.138,808.908,272.16

1,020.00154/1/191,020.00900.618,808.9073.41919.137,862.317,353.03Invoice Febrary

1,020.00165/1/191,020.00893.177,862.3165.52919.136,907.836,433.90Feb-18

1,020.00176/1/191,020.00885.796,907.8357.57919.135,945.395,514.77Interest Expense175.49

1,020.00187/1/191,020.00878.475,945.3949.54919.134,974.944,595.64Lease Liability175.49

1,020.00198/1/191,020.00871.214,974.9441.46919.133,996.403,676.51Amortization Expense919.13

1,020.00209/1/191,020.00864.013,996.4033.30919.133,009.702,757.39ROU Asset919.13

1,020.002110/1/191,020.00856.873,009.7025.08919.132,014.781,838.26Lease Liability1,000.00

1,020.002211/1/191,020.00849.792,014.7816.79919.131,011.57919.13AP1,000.00

1,020.002312/1/191,020.00842.761,011.578.43919.130.00(0.00)

…..

Invoice Dec 2019

Dec-19

Interest Expense8.43

Lease Liability8.43

Amortization Expense919.13

ROU Asset919.13

Lease Liability1,020.00

AP1,020.00

Operating Lease





RentMonthly1,0002% in year 2yesPayment In Advance: Payment End of Month:

NPV:22,059.09$21,876.78

Lease Expense:1,010.001,010.00

AmountPresent ValueROU Asset Carrying AmtInterest ComponentLease ExpenseAmortization ComponentLease Liability BalanceROU Asset Balancelease commencement date:

22,059.0922,059.09

01/1/181,000.001,000.0022,059.09- 01,010.001,010.0021,059.0921,049.09Journal Entry:

12/1/181,000.00991.7421,059.09175.491,010.00834.5120,234.5820,214.581-Jan-18

23/1/181,000.00983.5420,234.58168.621,010.00841.3819,403.2019,373.20ROU Asset22,059.09

34/1/181,000.00975.4119,403.20161.691,010.00848.3118,564.9018,524.90Lease Liability22,059.09

45/1/181,000.00967.3518,564.90154.711,010.00855.2917,719.6017,669.60

56/1/181,000.00959.3617,719.60147.661,010.00862.3416,867.2716,807.27

67/1/181,000.00951.4316,867.27140.561,010.00869.4416,007.8315,937.83Invoice January

78/1/181,000.00943.5616,007.83133.401,010.00876.6015,141.2315,061.23Jan-18

89/1/181,000.00935.7715,141.23126.181,010.00883.8214,267.4014,177.40Lease Expense1,010.00JE

910/1/181,000.00928.0314,267.40118.901,010.00891.1013,386.3013,286.30Lease Liability- 0JE

1011/1/181,000.00920.3613,386.30111.551,010.00898.4512,497.8512,387.85ROU Asset1,010.00JE

1112/1/181,000.00912.7612,497.85104.151,010.00905.8511,602.0011,482.00Lease Liability1,000.00POP

121/1/191,020.00923.3211,602.0096.681,010.00913.3210,678.6810,568.68AP1,000.00POP

132/1/191,020.00915.6910,678.6888.991,010.00921.019,747.679,647.67

143/1/191,020.00908.129,747.6781.231,010.00928.778,808.908,718.90Invoice February

154/1/191,020.00900.618,808.9073.411,010.00936.597,862.317,782.31Feb-18

165/1/191,020.00893.177,862.3165.521,010.00944.486,907.836,837.83Lease Expense1,010.00

176/1/191,020.00885.796,907.8357.571,010.00952.435,945.395,885.39Lease Liability175.49

187/1/191,020.00878.475,945.3949.541,010.00960.464,974.944,924.94ROU Asset834.51

198/1/191,020.00871.214,974.9441.461,010.00968.543,996.403,956.40Lease Liability1,000.00

209/1/191,020.00864.013,996.4033.301,010.00976.703,009.702,979.70AP1,000.00

2110/1/191,020.00856.873,009.7025.081,010.00984.922,014.781,994.78

2211/1/191,020.00849.792,014.7816.791,010.00993.211,011.571,001.57…….

2312/1/191,020.00842.761,011.578.431,010.001,001.570.000.00

Invoice Dec 2019

Dec-19

Lease Expense1,010.00

Lease Liability8.43

ROU Asset1,001.57


AP1,020.00

Proration (Finance)

LeaseSTORE00001Start Date1/10/18




RentMonthly1,0002% in year 2yesPayment In Advance:

The rent is started on Jan 10th and will be invoiced on the 1st of each monthNPV:22,011.42

Amortization Expense:880.4624 - the number of periods (quorter, year, ect) in the lease term

PeriodAmountPVROU Asset Carrying AmtInterest ComponentAmortization ExpenseLease Liability BalanceROU Asset Balancelease commencement date:

01/10/18709.68709.6822,011.42- 0880.4621,301.7421,130.96Journal Entry:

12/1/181,000.00991.7421,301.74177.51880.4620,479.2520,250.5010-Jan-18

23/1/181,000.00983.5420,479.25170.66880.4619,649.9119,370.05ROU Asset22,011.42

34/1/181,000.00975.4119,649.91163.75880.4618,813.6618,489.59Lease Liability22,011.42

45/1/181,000.00967.3518,813.66156.78880.4617,970.4417,609.13

56/1/181,000.00959.3617,970.44149.75880.4617,120.2016,728.68

67/1/181,000.00951.4317,120.20142.67880.4616,262.8715,848.22Invoice January

78/1/181,000.00943.5616,262.87135.52880.4615,398.3914,967.76Jan-18

89/1/181,000.00935.7715,398.39128.32880.4614,526.7114,087.31Interest Expense- 0

910/1/181,000.00928.0314,526.71121.06880.4613,647.7713,206.85Lease Liability- 0

1011/1/181,000.00920.3613,647.77113.73880.4612,761.5012,326.39Amortization Expense880.46

1112/1/181,000.00912.7612,761.50106.35880.4611,867.8411,445.94ROU Asset880.46

121/1/191,020.00923.3211,867.8498.90880.4610,946.7410,565.48Lease Liability709.68

132/1/191,020.00915.6910,946.7491.22880.4610,017.969,685.02AP709.68

143/1/191,020.00908.1210,017.9683.48880.469,081.458,804.57

154/1/191,020.00900.619,081.4575.68880.468,137.137,924.11Invoice Febrary

165/1/191,020.00893.178,137.1367.81880.467,184.947,043.65Jan-18

176/1/191,020.00885.797,184.9459.87880.466,224.816,163.20Interest Expense177.51

187/1/191,020.00878.476,224.8151.87880.465,256.685,282.74Lease Liability177.51

198/1/191,020.00871.215,256.6843.81880.464,280.494,402.28Amortization Expense880.46

209/1/191,020.00864.014,280.4935.67880.463,296.163,521.83ROU Asset880.46

2110/1/191,020.00856.873,296.1627.47880.462,303.632,641.37Lease Liability1,000.00

2211/1/191,020.00849.792,303.6319.20880.461,302.821,760.91AP1,000.00

2312/1/191,020.00842.761,302.8210.86880.46293.68880.46

24.001/9/20296.13242.65293.682.45880.460.00(0.00)…..

InvoiceJ an 2020

Jan-20


Lease Liability2.45


ROU Asset880.46

Lease Liability296.13

AP296.13

Proration (Operating)






The rent is started on Jan 10th and will be invoiced on the 1st of each monthNPV:22,011.42

Lease Expense:969.8325 - the number of payments

PeriodAmountPVROU Asset Carrying AmtInterest ComponentAmortization ComponentLease ExpenseLease Liability BalanceROU Asset Balancelease commencement date:

01/10/18709.68709.6822,011.42- 0969.83969.8321,301.7421,041.58Journal Entry:

12/1/181,000.00991.7421,301.74177.51792.32969.8320,479.2520,249.271/10/18

23/1/181,000.00983.5420,479.25170.66799.17969.8319,649.9119,450.09ROU Asset22,011.42

34/1/181,000.00975.4119,649.91163.75806.08969.8318,813.6618,644.01Lease Liability22,011.42

45/1/181,000.00967.3518,813.66156.78813.05969.8317,970.4417,830.96

56/1/181,000.00959.3617,970.44149.75820.08969.8317,120.2017,010.88

67/1/181,000.00951.4317,120.20142.67827.16969.8316,262.8716,183.72Invoice January

78/1/181,000.00943.5616,262.87135.52834.31969.8315,398.3915,349.41Jan-18

89/1/181,000.00935.7715,398.39128.32841.51969.8314,526.7114,507.90Lease Expense969.83

910/1/181,000.00928.0314,526.71121.06848.78969.8313,647.7713,659.12Lease Liability- 0

1011/1/181,000.00920.3613,647.77113.73856.10969.8312,761.5012,803.02ROU Asset969.83

1112/1/181,000.00912.7612,761.50106.35863.49969.8311,867.8411,939.53Lease Liability709.68

121/1/191,020.00923.3211,867.8498.90870.93969.8310,946.7411,068.60AP709.68

132/1/191,020.00915.6910,946.7491.22878.61969.8310,017.9610,189.99

143/1/191,020.00908.1210,017.9683.48886.35969.839,081.459,303.64Invoice February

154/1/191,020.00900.619,081.4575.68894.15969.838,137.138,409.49Feb-18

165/1/191,020.00893.178,137.1367.81902.02969.837,184.947,507.46Lease Expense969.83

176/1/191,020.00885.797,184.9459.87909.96969.836,224.816,597.51Lease Liability177.51

187/1/191,020.00878.476,224.8151.87917.96969.835,256.685,679.55ROU Asset792.32

198/1/191,020.00871.215,256.6843.81926.03969.834,280.494,753.52Lease Liability1,000.00

209/1/191,020.00864.014,280.4935.67934.16969.833,296.163,819.36AP1,000.00

2110/1/191,020.00856.873,296.1627.47942.36969.832,303.632,877.00

2211/1/191,020.00849.792,303.6319.20950.64969.831,302.821,926.36…….

2312/1/191,020.00842.761,302.8210.86958.98969.83293.68967.38

241/9/20296.13242.65293.682.45967.38969.830.000.00Invoice Dec 2019

Dec-19

Lease Expense969.83


ROU Asset958.98


AP1,020.00

Invoice Jan 2020

Jan-20

Lease Expense969.83

Lease Liability2.45

ROU Asset967.38


AP296.13

Lease Balances Report

Lease Liability and ROU Asset Balances

As of 12/1/18

LeaseCharge:Lease Liability GL AccountLease Liability Balance:ROU Asset GL AccountROU Asset Balance

LeaseNumber0005 Lease Description

Base Rent100-2600-1011,867.84100-1900-1011,445.94

Maintenance100-2700-10xxx100-1800-10xxxx

Totalxxxxxxx


Base Rent100-2600-10xxx100-1900-10xxxx

Insurance100-2700-10xxx100-1800-10xxxx

Totalxxxxxxx

Lease Liability Balance

GL AccountLeaseCharge:AmountROU Asset Balance

100-2600-10

LeaseNumber0005 Lease DescriptionBase Rent11,867.84

LeaseNumber0007 Lease DescriptionBase Rentxxxx

Insurancexxxx

Totalxxxx

ROU Asset Balance

GL AccountLeaseCharge:Amount

100-1900-10LeaseNumber0005 Lease DescriptionBase Rent11,445.94

LeaseNumber0007 Lease DescriptionBase Rentxxx

Totalxxx

Sorted by Lease

Sorted by GL Account

Lease Profit and Loss Report

ASC842 P&L Impact Report

for the period of Jan 1, 2019 - Dec 31, 2019

LeaseCharge:Interet ExpenseGL AccountInterest ExpenseAmortization ExpenseGL AccountAmortization ExpenseLease ExpenseGL AccountLease ExpenseGain/Loss on Modifiation GL AccountGain/Loss on Modifiation


Base rent100-6700-10546.02100-6900-1010,479.58100-8700-1062.83

Insurance100-6700-00xxx100-6900-00xxx100-8700-10xxx

Totalxxxxxxxxx


Base rent100-6700-1010,359.98100-8700-10(61.07)

Elena Kovski: Negative because of Loss

Maintenance100-6900-00xxx100-8700-10xxx

Totalxxxxxx

GL AccountLeaseCharge:

100-6900-10

LeaseNumber0005 Lease DescriptionBase rent546.02

LeaseNumber0006 Lease DescriptionInsurancexxx

TotalXXX

100-6900-10

LeaseNumber0006 Lease DescriptionBase rent10,479.58

LeaseNumber0006 Lease DescriptionMaintenancexxx

TotalXXX

Sorted by Lease

Sorted by GL Account

Lease Modification (Finance)


Term 2 yearsEnd Date1/10/201-Jan-181-Jun-19

Discount Rate:10.000%8.000%


RentMonthly1,0002% in year 2yesPayment In Advance: At the time of modification

The rent is started on Jan 10th and will be invoiced on the 1st of each monthNPV:22,330.226,096.00

Amortization Expense:930.43832.497+10/31 - the number of months between the modification date and lease end date

On June 1, 2019, the lease was re-negatiated to $850 payment

June 1, 2019 Discount Rate:8%

Payment AmountPeriodROU Asset Payment AmountPVROU Asset Carrying AmtInterest ComponentAmortization Expense:Lease Liability BalanceROU Asset BalanceJElease commencement date:

1,000.0001/10/181,000.001,000.0022,330.22- 0630.2921,330.2221,699.93Journal Entry:

1,000.0012/1/181,000.00991.7421,330.22177.75930.4320,507.9720,769.5110-Jan-18

1,000.0023/1/181,000.00983.5420,507.97170.90930.4319,678.8719,839.08ROU Asset22,330.22

1,000.0034/1/181,000.00975.4119,678.87163.99930.4318,842.8618,908.65Lease Liability22,330.22

1,000.0045/1/181,000.00967.3518,842.86157.02930.4317,999.8917,978.23

1,000.0056/1/181,000.00959.3617,999.89150.00930.4317,149.8917,047.80

1,000.0067/1/181,000.00951.4317,149.89142.92930.4316,292.8016,117.38Invoice January

1,000.0078/1/181,000.00943.5616,292.80135.77930.4315,428.5715,186.951-Jan-18

1,000.0089/1/181,000.00935.7715,428.57128.57930.4314,557.1514,256.53Interest Expense- 0

1,000.00910/1/181,000.00928.0314,557.15121.31930.4313,678.4613,326.10Lease Liability- 0


1,000.001112/1/181,000.00912.7612,792.44106.60930.4311,899.0511,465.25ROU Asset630.29

1,020.00121/1/191,020.00923.3211,899.0599.16930.4310,978.2110,534.82Lease Liability1,000.00

1,020.00132/1/191,020.00915.6910,978.2191.49930.4310,049.699,604.40AP1,000.00

1,020.00143/1/191,020.00908.1210,049.6983.75930.439,113.448,673.97

1,020.00154/1/191,020.00900.619,113.4475.95930.438,169.387,743.54Invoice Febrary

1,020.00165/1/191,020.00893.178,169.3868.08930.437,217.466,813.121-Jan-18

850.0006/1/19850.00850.006,096.00- 0832.495,246.005,263.50Interest Expense177.75

850.0017/1/19850.00844.375,246.0034.97832.494,430.974,431.01Lease Liability177.75

850.0028/1/19850.00838.784,430.9729.54832.493,610.513,598.52Amortization Expense930.43

850.0039/1/19850.00833.223,610.5124.07832.492,784.582,766.03ROU Asset930.43

850.00410/1/19850.00827.712,784.5818.56832.491,953.141,933.53Lease Liability1,000.00

850.00511/1/19850.00822.221,953.1413.02832.491,116.171,101.04AP1,000.00

850.00612/1/19850.00816.781,116.177.44832.49273.61268.55

274.196.321/10/20274.19262.91273.610.59268.550.00(0.00)…..

Journal Entry (Lease Modification)

1-Jun-19


ROU Asset1,058.64

Gain on Modification62.83

Invoice June

1-Jun-19

Interest Expense- 0

Lease Liability- 0


ROU Asset832.49


AP850.00

Invoice July

1-Jul-19




ROU Asset832.49


AP850.00

Invoice Jan

10-Jan-20


Lease Liability0.59


ROU Asset268.55


AP274.19

Lease Modif.(Operating)


Term 2 yearsEnd Date1/10/201/10/181-Jun-19

Discount Rate:10.000%8.000%



The rent is started on Jan 10th and will be invoiced on the 1st of each monthNPV:22,330.226,096.00

On June 1, 2019, the lease was re-negatiated to $850 paymentLease Expense:982.76778.028 - number of payments

June 1, 2019 Discount Rate:8%

PeriodAmountPVROU Asset Carrying AmtInterest ComponentAmortization ComponentLease ExpenseLease Liability BalanceROU Asset Balancelease commencement date:

01/10/181,000.001,000.0022,330.22- 0982.76982.7621,330.2221,347.46Journal Entry:

12/1/181,000.00991.7421,330.22177.75805.01982.7620,507.9720,542.451/10/18

23/1/181,000.00983.5420,507.97170.90811.86982.7619,678.8719,730.59ROU Asset22,330.22

34/1/181,000.00975.4119,678.87163.99818.77982.7618,842.8618,911.82Lease Liability22,330.22

45/1/181,000.00967.3518,842.86157.02825.74982.7617,999.8918,086.08

56/1/181,000.00959.3617,999.89150.00832.76982.7617,149.8917,253.32

67/1/181,000.00951.4317,149.89142.92839.85982.7616,292.8016,413.47Invoice January

78/1/181,000.00943.5616,292.80135.77846.99982.7615,428.5715,566.48Jan-18

89/1/181,000.00935.7715,428.57128.57854.19982.7614,557.1514,712.29Lease Expense982.76

910/1/181,000.00928.0314,557.15121.31861.45982.7613,678.4613,850.84Lease Liability- 0

1011/1/181,000.00920.3613,678.46113.99868.77982.7612,792.4412,982.07ROU Asset982.76

1112/1/181,000.00912.7612,792.44106.60876.16982.7611,899.0512,105.91Lease Liability1,000.00

121/1/191,020.00923.3211,899.0599.16883.60982.7610,978.2111,222.31AP1,000.00

132/1/191,020.00915.6910,978.2191.49891.28982.7610,049.6910,331.03

143/1/191,020.00908.1210,049.6983.75899.01982.769,113.449,432.02Invoice February

154/1/191,020.00900.619,113.4475.95906.82982.768,169.388,525.20Feb-18

165/1/191,020.00893.178,169.3868.08914.68982.767,217.467,610.52Lease Expense982.76

06/1/19850.00850.006,096.00- 0778.02778.025,246.005,317.97Lease Liability177.75

17/1/19850.00844.375,246.0034.97743.05778.024,430.974,574.92ROU Asset805.01

28/1/19850.00838.784,430.9729.54748.48778.023,610.513,826.44Lease Liability1,000.00

39/1/19850.00833.223,610.5124.07753.95778.022,784.583,072.48AP1,000.00

410/1/19850.00827.712,784.5818.56759.46778.021,953.142,313.02

511/1/19850.00822.221,953.1413.02765.00778.021,116.171,548.02…….

612/1/19850.00816.781,116.177.44770.58778.02273.61777.44

6.321/10/20274.19262.91273.610.59777.44778.020.000.00Journal Entry (Lease Modification)

1-Jun-19


ROU Asset1,182.54

Loss on Modification61.07

Invoice June

Jun-19

Lease Expense778.02

Lease Liability- 0

ROU Asset778.02


AP850.00

Invoice July

Jul-19

Lease Expense778.02


ROU Asset743.05


AP850.00

Invoice Jan

Jan-20

Lease Expense778.02

Lease Liability0.59

ROU Asset777.44


AP274.19

Modification no Process (Financ





RentMonthly1,0002% in year 2yesPayment In Advance (Annuity Due)Payment End of Month:

NPV:22,059.0921,876.78

Amortization Expense:919.13951.16

Payment AmountROU Asset Payment AmountPresent ValueROU Asset Carrying AmtInterest ComponentAmortization ExpenseLease Liability BalanceROU Asset Balancelease commencement date:

1,000.0001/1/181,000.001,000.0022,059.09- 0919.1321,059.0921,139.96Journal Entry:

1,000.0012/1/181,000.00991.7421,059.09175.49919.1320,234.5820,220.831-Jan-18

1,000.0023/1/181,000.00983.5420,234.58168.62919.1319,403.2019,301.70ROU Asset22,059.09

1,000.0034/1/181,000.00975.4119,403.20161.69919.1318,564.9018,382.57Lease Liability22,059.09

1,000.0045/1/181,000.00967.3518,564.90154.71919.1317,719.6017,463.44

1,000.0056/1/181,000.00959.3617,719.60147.66919.1316,867.2716,544.32

1,000.0067/1/181,000.00951.4316,867.27140.56919.1316,007.8315,625.19Invoice January

1,000.0078/1/181,000.00943.5616,007.83133.40919.1315,141.2314,706.06Jan-18

1,000.0089/1/181,000.00935.7715,141.23126.18919.1314,267.4013,786.93Interest Expense- 0JE

1,000.00910/1/181,000.00928.0314,267.40118.90919.1313,386.3012,867.80Lease Liability- 0JE

1,000.001011/1/181,000.00920.3613,386.30111.55919.1312,497.8511,948.67Amortization Expense919.13JE

1,000.001112/1/181,000.00912.7612,497.85104.15919.1311,602.0011,029.54ROU Asset919.13JE

1,020.00121/1/191,020.00923.3211,602.0096.68919.1310,678.6810,110.42Lease Liability1,000.00POP

1,020.00132/1/191,020.00915.6910,678.6888.99919.139,747.679,191.29AP1,000.00POP

1,020.00143/1/191,020.00908.129,747.6781.23919.138,808.908,272.16

payment decreases >>850.00154/1/191,020.00900.618,808.9073.41919.137,862.317,353.03Invoice Febrary

no Modification porcess850.00165/1/191,020.00893.177,862.3165.52919.136,907.836,433.90Feb-18

850.00176/1/191,020.00885.796,907.8357.57919.135,945.395,514.77Interest Expense175.49

850.00187/1/191,020.00878.475,945.3949.54919.134,974.944,595.64Lease Liability175.49

850.00198/1/191,020.00871.214,974.9441.46919.133,996.403,676.51Amortization Expense919.13

payment increases >>1,050.00209/1/191,020.00864.013,996.4033.30919.133,009.702,757.39ROU Asset919.13

no Modification porcess1,050.002110/1/191,020.00856.873,009.7025.08919.132,014.781,838.26Lease Liability1,000.00

1,050.002211/1/191,020.00849.792,014.7816.79919.131,011.57919.13AP1,000.00

1,050.002312/1/191,020.00842.761,011.578.43919.130.00(0.00)

…..

Invoice AprilInvoice Dec 2019

Apr-19Dec-19

Interest Expense73.41Journal EntryInterest Expense8.43

Lease Liability73.41Journal EntryLease Liability8.43

Amortization Expense919.13Journal EntryAmortization Expense919.13

ROU Asset919.13Journal EntryROU Asset919.13

Variable Rent Expense(170.00)

Mandeep Boparai: If this amount is negative, make it credit

Journal EntryLease Liability1,020.00

Lease Liability(170.00)

Mandeep Boparai: If this amount is negative, make it debitJournal EntryAP1,020.00

Lease Liability850.00AP INVOICE

AP850.00AP INVOICE

Invoice Sept

Sep-19

Interest Expense33.30Journal Entry

Lease Liability33.30Journal Entry

Amortization Expense919.13Journal Entry

ROU Asset919.13Journal Entry

Variable Rent Expense30.00Journal Entry

Lease Liability30.00Journal Entry

Lease Liability1,050.00AP INVOICE

AP1,050.00AP INVOICE

Terminati (Finance)


Term 2 yearsEnd Date1/10/201-Jan-18



RentMonthly1,0002% in year 2yesPayment In Advance: At the time of termination

The rent is started on Jan 10th and will be invoiced on the 1st of each monthNPV:22,330.22- 0

Amortization Expense:930.43- 0

Lease terminated on June 01/2019

Payment AmountPeriodROU Asset Payment AmountPVROU Asset Carrying AmtInterest ComponentAmortization Expense:Lease Liability BalanceROU Asset Balancelease commencement date:

1,000.0001/10/181,000.001,000.0022,330.22- 0630.2921,330.2221,699.93Journal Entry:

1,000.0012/1/181,000.00991.7421,330.22177.75930.4320,507.9720,769.5110-Jan-18

1,000.0023/1/181,000.00983.5420,507.97170.90930.4319,678.8719,839.08ROU Asset22,330.22

1,000.0034/1/181,000.00975.4119,678.87163.99930.4318,842.8618,908.65Lease Liability22,330.22

1,000.0045/1/181,000.00967.3518,842.86157.02930.4317,999.8917,978.23

1,000.0056/1/181,000.00959.3617,999.89150.00930.4317,149.8917,047.80

1,000.0067/1/181,000.00951.4317,149.89142.92930.4316,292.8016,117.38Invoice January

1,000.0078/1/181,000.00943.5616,292.80135.77930.4315,428.5715,186.951-Jan-18

1,000.0089/1/181,000.00935.7715,428.57128.57930.4314,557.1514,256.53Interest Expense- 0

1,000.00910/1/181,000.00928.0314,557.15121.31930.4313,678.4613,326.10Lease Liability- 0


1,000.001112/1/181,000.00912.7612,792.44106.60930.4311,899.0511,465.25ROU Asset630.29

1,020.00121/1/191,020.00923.3211,899.0599.16930.4310,978.2110,534.82Lease Liability1,000.00

1,020.00132/1/191,020.00915.6910,978.2191.49930.4310,049.699,604.40AP1,000.00

1,020.00143/1/191,020.00908.1210,049.6983.75930.439,113.448,673.97

1,020.00154/1/191,020.00900.619,113.4475.95930.438,169.387,743.54Invoice Febrary

1,020.00165/1/191,020.00893.178,169.3868.08930.437,217.466,813.121-Jan-18

- 006/1/19- 0- 0- 0- 0- 0- 0- 0Interest Expense177.75

- 017/1/19- 0- 0- 0- 0- 0- 0- 0Lease Liability177.75

- 028/1/19- 0- 0- 0- 0- 0- 0- 0Amortization Expense930.43

- 039/1/19- 0- 0- 0- 0- 0- 0- 0ROU Asset930.43

- 0410/1/19- 0- 0- 0- 0- 0- 0- 0Lease Liability1,000.00

- 0511/1/19- 0- 0- 0- 0- 0- 0- 0AP1,000.00

- 0612/1/19- 0- 0- 0- 0- 0- 0- 0

- 06.321/10/20- 0- 0- 0- 0- 0- 0- 0…..

Journal Entry (Lease Modification)

1-Jun-19


ROU Asset6,813.12

Gain on Modification404.34

Questions to Ask Yourself / Your VAR• Will my ERP handle this today?

• Hint: GP cannot! So, do you have the Excel skills/time?

• Will the recommended solution automatically calculate and build the RoU asset and liability at the correct values, or do I have to do it manually?

• Will the recommended solution handle the new reporting requirements?• Will the recommended solution assist with easing the implementation? • Is the recommended solution GP integrated, or will I have to use manual

integrations and journal entries to update my GL?• Will the GL be up to date “real time” or only after a data synchronization?• Can my VAR train me and support me on whatever solution I choose?

No right or wrong answers except what works for you…but ASK!44

Binary Stream’s Property ManagementFully integrated lease management module for Dynamics GP (D365 F&O coming in 2019!)

• Designed for lessors or lessees• Commercial, retail, residential applications• Build and manage complex lease payment escalations• Percent, or sales based, rent• Common Area Maintenance reconciliation• Automatic creation of Right of Use Asset and Lease Liability• Adjustment and true up of RoU Asset and Lease Liability when

lease terms and conditions change• In-depth reporting – Report Writer, or SSRS

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Binary Stream’s Property ManagementScreenshots

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SummaryLease Accounting under ASC 842

• Reviewed ASC 842• Lease classification examples• Lessee accounting examples• What you need to know to get ready!• How to handle ASC 842 in Dynamics GP – Binary Stream’s PrM

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For more ASC 842 information and GP solutionsCady Jackson | Client Account [email protected] | P 206-826-2984 | M 828-388-0057

NexTecGroup.com

Lease Accounting under ASC 842IntroductionDisclaimerSession agendaGoals / ObjectivesChallengesASC 842– LeasesWhat is ASC 842?Do I need to care about ASC 842?ASC 842 timingTransitionTransition – BREAKING NEWS!Identify Your LeasesSlide Number 14Lease, or no lease?Lease, or no lease?Lease, or no lease?Lease, or no lease?Lease, or no lease?Identify your leases (continued)Identify your leases (continued)Identify your leases (continued)Slide Number 23Lessee accountingImplementing a leaseImplementing a lease (continued)Implementing a lease (continued)Implementing a lease (continued)Implementing a lease (continued)Implementing a lease (continued)And that is the easy part!!!Slide Number 34Lease / Non-lease components Lease / Non-lease components Direct vs Indirect CostsWhat the experts are sayingWhat Do I Do?Steps to prepareSteps to prepareSlide Number 42What does that mean for my Dynamics ERP?Questions to Ask Yourself / Your VARBinary Stream’s Property ManagementBinary Stream’s Property ManagementSummarySlide Number 48For more ASC 842 information and GP solutions

Documents

Lease Accounting under ASC 842 · • The discount rate is the rate implicit in the lease, or ... • If a lease renewal exists that extends the lease beyond 12 months, but is not