- Mastering Lease Audits Under ASC 842
Explore key responsibilities for auditors under ASC 842, including lease identification, classification, and the accurate reporting of ROU assets.
Navigate the complexities of lease identification, classification, and reporting under ASC 842.
The ASC 842 lease accounting standard introduces significant changes to how leases are identified, classified, and reported. Auditors must ensure that all lease arrangements, including embedded leases in service contracts, are accurately identified. This guide delves into key responsibilities under ASC 842, such as verifying right-of-use (ROU) asset and lease liability calculations, assessing lease classifications (operating vs. finance), and ensuring comprehensive disclosures.
With the transition to ASC 842, auditors need to evaluate clients’ selected transition approaches and verify cumulative-effect adjustments. Additionally, auditors should consider potential impairments of ROU assets now recognized on the balance sheet. IT systems and internal controls must also be reviewed to ensure compliance with the new lease reporting standards.
Download the comprehensive guide to stay ahead of the changes and ensure your audit processes align with ASC 842 requirements.
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- Key Metrics and Insights at a Glance
Lease Identification
ASC 842 requires auditors to identify all lease components, including embedded leases in service contracts.
ROU Assets and Liabilities
Auditors must verify right-of-use (ROU) assets and lease liabilities for accurate financial reporting.
Transition Accounting
Auditors must review clients’ transition approaches and verify cumulative-effect adjustments for proper ASC 842 compliance.
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