The Run-Up to the New Leases Standard

Takeaways from the Lease and Finance Accountants Conference

The 2018 ELFA Lease and Finance Accountants Conference, held in Philadelphia in September, was well timed as most public companies are in the final stages of preparing to adopt the new leases standard. The conference focused on the new standard and provided attendees with the opportunity to learn more about ASC 842 and related emerging issues. The topics covered included:

What is a lease for purposes of the standard and how to determine a lease versus a service transaction;
Determining the payments that are included in lease accounting and the implications that has for lessors and lessees;
The changes that have been made to the standard since its release in 2016;
How the IFRS leases standard differs from the US standard; and
The various ways companies may choose to adopt the standard along with the related lease disclosures.

The conference also provided the opportunity for the audience to hear directly from the foremost lease experts at the large accounting firms. The topics discussed by the experts included: unique considerations related to the determination of the lease term; lessor classification questions that arise under the new standard; lessee discount rates and the challenges that companies may face when determining that rate; the importance of materiality and judgments when applying the standard; and lease and non-lease components in the accounting for leases. On the second day of the conference, attendees also had the opportunity to hear from the Vice Chair of the Financial Accounting Standards Board, James Kroeker. His presentation covered how the Board functions and what the Board has been doing to answer implementation questions. The recent exposure draft on lessor accounting, which ELFA has commented on, was also covered during the presentation.

19 companies exhibited at the joint Accounting and Technology Exhibition.

The Financial Accounting Committee gathered before the conference. The committee’s Lease Accounting Resource Group is identifying technical accounting issues related to the implementation of ASC 842.

While the conference focused on lease accounting and the new leases standard, that was not the only subject covered. There were sessions on lease pricing, both introductory and advanced; the new credit loss accounting standard; and several pre-conference workshops. There was also a thought-provoking joint session with the Operations & Technology Conference that featured a presentation by Dr. Robert Wescott, President of Keybridge LLC, on the future of work and employment. If you missed the conference and wish to learn more about the topics that were covered, copies of the session handouts and audio recordings are available on the ELFA’s website at www.elfaonline.org/events/conference-resource-center. Save the date: The 2019 Lease and Finance Accountants Conference will be held Sept. 16–18 in Chicago.

EdSessions