Hot Topic: Leases
Hot Topic | January 2023
ASC 842 transition complexities from recent economic conditions
This Hot Topic compiles questions on select ASC 842 implementation issues from the KPMG Leases handbook into one concise document to assist entities in their initial application of ASC 842.
Applicability
Entities that have not yet adopted or issued financial statements under ASC 842 (leases)
Relevant dates
Key impacts
During public companies’ adoption of ASC 842 in 2019 we observed companies experience challenges with:
- applying ASC 360 (property, plant and equipment) impairment and abandonment requirements to previously unrecognized operating lease right-of-use (ROU) assets; and
- understanding how ASC 420 (exit and disposal costs), which previously applied to operating leases under the legacy leases guidance (ASC 840), applies to those leases under and in transition to ASC 842.
Due to economic events and conditions of the last few years, these issues may be even more acute for private entities adopting and reporting under ASC 842 for the first time.
This Hot Topic compiles specific questions on these topics from the Leases handbook into one concise document to assist entities in their initial application of ASC 842.
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Leases
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Resource
Handbook: Leases
Latest edition: Our in-depth guide to ASC 842 – with Q&As, interpretive guidance and examples.
Handbook: Impairment of nonfinancial assets
Latest edition: KPMG in-depth guide to impairment testing, covering the models in ASC 350-20, ASC 350-30 and ASC 360.
Leases: Hot Topics
These focused Hot Topics are intended for those with an interest in the detailed application of ASC 842.
Leases
Our reporting, guidance and publications relevant to the FASB's new leases standard for lessees and lessors for all industries. KPMG specialists provide an in-depth look at ASC 842 implementation
Resource
Hot Topic: Impairment
Nonfinancial asset impairment in a period of economic uncertainty.
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