Gain a better understanding of the new lease accounting requirements and how to comply with them.
The adoption of the new lease accounting standards from the FASB, IASB and GASB have already seen far reaching financial and organizational implications for companies of all sizes and are affecting the advice and counsel their advisors and attorneys provide during lease negotiations. The advent of these new lease accounting standards require all parties to a lease, and their advisors, to understand how concepts such as how a renewal option can result in a 10 year lease being accounted for as though it were a 20 year lease, with a near doubling of the impact on the company’s balance sheet and other financial results. Importantly, the impacts are not just financial in nature, and the nonfinancial and organizational impacts are widely expected to affect governance, risk and compliance, internal controls, accounting policies, SEC reporting and M&A activity. Many of these areas are most affected by the subjective nature of many aspects of the new standards, and there are many lessons that have been learned in the nearly five years since ASC 842 and IFRS 16 first arrived on the scene. Understanding these issues will be critical for the purposes of helping companies successfully navigate the accounting, reporting, and leasing processes ahead.
Learning Objectives
- You will be able to review new lease accounting rules and what has changed.
- You will be able to recognize operating leases vs. finance leases.
- You will be able to describe the mechanics of the new rule.
- You will be able to expalin errors with lease accounting rules.
Agenda
Overview of New Lease Accounting Rules: Cross-Cutting Legal Implications
Background
- What Has Changed
- Pervasive Impacts Across the Company
- Types of Leases - IASB, FASB and GASB Differences - Which Acronym Applies?
Cutting Through the Fog: Drafting and Negotiating Tips
- Key Differences Between Old and New Rules
- Examples of Financial Statement Impact and Differences
Dealing With Subjective Issues: SOX, SEC, GRC and Drafting Considerations
- Is Your ‘Lease’ a Lease or a Service Agreement.
- Operating vs Finance Leases
- What Are ‘Non-Lease Components’ and Why They Matter.
- Disguised Minimum Rent
- Renewals and Significant Economic Incentives (SEI)
- Examples of the Impact of SEIs on Financial Statements
The Mechanics of the New Rules: Transaction Structure and Financial Results
- Minimizing Balance Sheet/Shareholder Equity Impacts
- Maximizing EBITDA Results
- Timing Differences: When New Leases and Amendments Impact Financial Reporting
- The New World of Sale-Leasebacks and ‘Failed Sale, Sale Leasebacks’
Errors With Lease Accounting Rules: Restatements, Audit Failures and SEC Reporting
Speakers
Marc A. Maiona,
LeaseCalcs, Inc.- Founder and president of LeaseCalcs, Inc., establishing the firm in 2011 as the first SaaS solution to address and solve the problems resulting from the new lease accounting standards from the FASB and IASB
- Represented large, sophisticated tenants across a broad spectrum of industries, including firms like Fidelity Investments, State Street Bank, General Dynamics, Chevron, ExxonMobil, Boston Consulting Group, Andrews & Kurth, Cooley and scores of others in order to assist them with the auditing and accounting related to their real estate leases
- Many articles on the subject of commercial leasing and lease accounting issues have been published in leading industry publications such as Corporate Real Estate Journal
- Regularly serves as a faculty member for CLE and CPE accredited seminars on the subjects of lease accounting and additional rent provisions in office leases, including the “Negotiating Commercial Leases” program for Practising Law Institute, and similar programs for Lorman and other providers of continuing education, and is frequently called upon as an expert witness in commercial leasing disputes
- Bachelor’s degree in economics, University of California, Irvine
Who Should Attend
This live webinar is designed for accountants, CPAs, CFOs, controllers, presidents, vice presidents, finance directors, tax managers, bookkeepers, business owners, and managers.
