Best Certified Public Accountants in Macon, GA

The new Financial Accounting Standards Board (FASB) change requires companies to record an asset and a liability on balance sheets for leases longer than one year. It represents a fundamental change in lease accounting that will significantly impact your business’s financial statements. Understanding these changes is crucial to ensuring full compliance with and a successful transition to the new standard. The change classifies leases into two types: operating leases and finance leases. Determining the type of lease that applies involves reviewing specific criteria, which impacts the recording of the liability on the balance sheet. Additionally, the change affects all leases — not just real estate. Any equipment, such as copiers, printers, vehicle leases and furniture, are covered with the exception of the following: • Short-term leases (those with a term of 12 months or fewer) • Leases of intangible assets like software or copyrights • Leases to explore for or use natural resources • Leases of biological assets • Service concession arrangements Given the complexity and data-gathering demands of recording assets, liabilities and expenses under the new standard, it’s important to review existing contracts and establish systems to gather key information items. Examples of data that need to be reviewed include lease terms, interest rates and amortization of lease liabilities by year. Contact our offices to discuss.