Compliance Glossary

ASC 842 Compliance

ASC 842 Overview

ASC 842, also referred to as Accounting Standards Codification Topic 842 or FASB Topic 842 — is the new Financial Accounting Standards Board’s (FASB) lease accounting standard, replacing ASC 840.

What does ASC 842 mean for my business?

ASC 842 requires the tracking and disclosure of leased assets. It contains guidance on the required accounting and financial reporting for agreements that meet the standard’s definition of a ‘lease’. Under ASC 842, almost all leases must be represented on your balance sheet. Before this new regulation, leases were like credit card transactions you never checked. Now, you have to share your balance.

What is ASC 842 compliance?

Staying compliant means accurately tracking ASC 842 balance sheet information. Under ASC 840, this was simply the start date, end date, and payment stream. Under ASC 842, you also need to collect incentives, allowances, and track options—while making judgments involving capital lease testing, interest rates, lease performance, and more.

For Further Reading on ASC 842 Compliance:

• ASC 842 Summary
• ASC 842 vs IFRS 16
• ASC 842 Disclosure Requirements
• ASC 842 Case Study – Taboola
• Equipment Lease Accounting Under ASC 842
• Lessor vs Lessee Under ASC 842
• Lease Modifications Under ASC 842
• Operating Leases Under ASC 842
• The Ultimate Guide to ASC 842