This assignment requires you to research a standard that has been considered one of the best or worst accounting standards â€“ that is, depending on who you ask.
The original Lease accounting standard (FAS 12) achieved some of its objectives. However, there were significant enough issues that FASB reviewed and worked on revising this standard for years. FASB recently issued the new lease reporting requirement (ASC 842) and, because of the amount of leasing transactions the US, this is a very relevant and important issue in financial reporting.
Directions: This research consists of two parts. First, there is the research assignment and the second part requires you to complete the case Logical Logistics.
This part should be 8 pages- use and provide references. The paper should be your thoughts and words. If you use a source you must cite it in the paper or it will be considered plagiarism.
- Why did FASB feel it was necessary to issue an original standard on leases (FAS 13)?
- What was the accounting treatment of leases in FAS 13?
- What were the issues associated with FAS 13 that prompted FASB to significantly revise the standard for recording leases?
- How long has FASB been working on the new lease standard (ASC 842)? Has it been an issue-free standard? What is the effective date of the new standard?
- How will leases be treated with new standard?
- Are there expected economic consequences associated with the new standard?
Part II Logical Logistics Recording a Lease (2-3 pages)
Directions for the case (Posted below).
This part is should be well written, use citations and be professionally presented.
- Determine whether each of Autoâ€™s contracts with Atlantic for Sedan and Luxury Car contains an identified asses
- Determine where each contract conveys the right to control the use of the identified asset to the lessee.
- How will the leases be reported in the financial statement