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This course provides a basic understanding of the new lease accounting rules pursuant to Accounting Standards Codification (ASC) Topic 842, Leases, issued in February 2016. ASC 842 makes substantial changes to the accounting for leases, primarily for the Lessee.

A lease conveys the right to the Lessee to control the use of the identified property, plant, or equipment for a period of time in exchange for consideration to the Lessor. For the Lessee, leases are either Finance leases or Operating leases.  The Lessee will record a right of use asset and lease liability for all leases with a term greater than one year. A Finance lease must meet one of five requirements, four of which are similar to prior capital lease accounting. If a lease is not a Finance lease, it’s an Operating lease. Most leases of equipment will be Finance leases and space leases will be Operating leases. For the Lessor, a lease is either an Operating lease, Direct Financing lease or Sales-Type lease. In general, the accounting for the Lessor has not changed substantially from the prior rules.

Accounting for leases from both the Lessee's and Lessor's perspective will be analyzed as well as lease straight lining, advantages and disadvantages of leasing, financial statement disclosure and the financial impact of the new rules. 

Learning Objectives

  • Discover the new accounting rules pursuant to Accounting Standards Codification (ASC) Topic 842, Leases.
  • Explore the accounting for Finance and Operating leases for Lessees.
  • Explore the accounting for Operating, Direct Financing, and Sales-Type leases for Lessors.
  • Discover how to calculate right of use asset, lease liability, interest expense, and amortization of the leased asset.
  • Discover specific examples of lease accounting for both Lessee and Lessor.
  • Discover the concept of straight lining of leases.
  • Recognize the advantages and disadvantages of leasing.
  • Identify the new financial statement disclosures for leases.

 

50 Reviews (190 ratings)Reviews

4
Member's Profile
Liked to keep up to date with new changes.
3
Anonymous Author
A complex course for introductory purposes
5
Member's Profile
Easy to follow.
5
Anonymous Author
That is great!
4
Anonymous Author
Good overview of the new lease accounting rules with examples to reinforce understanding. One of the exam questions, however, seems to provide an answer contrary to the information provided in the presentation slides. It states lessor accounting for an operating lease of rental space includes "A debit to leased asset and a credit to net investment in lease." as the correct answer. The slide presentation clearly indicates that the answer should be a dr. to cash and a cr. to rent income. I believe a dr. to cash and a cr. to rental income is the correct answer for lessor's operating lease. Why would one ever dr. a leased asset and cr. to net investment in lease?
3
Anonymous Author
Overall effective overview. Test focused more on whether one can perform calculations versus understanding the basics of new lease accounting rules and impact. Since it is a "101" course, I believe the concepts and impact are more important than the calculations. Instructor starts off the presentation very technical, with the information I wished to glean more in the impact and overview. For those in the business of lease accounting, this would be fine.
4
Anonymous Author
Overall, I liked the course. I would like a little more explanation of some of the rules rather than just reading the slides. All accounting rules are written in very complex terms and I felt as though the instructor was merely reading the slides for most of the course.
5
Member's Profile
A great introductory course for the new lease accounting standard. Covers pretty much all of what I'm expecting for the course (overview of the new rules). As other students pointed out, the exam was too technical and also one question has 2 possible answers.
4
Member's Profile
Liked the entry, schedules. Anyone wanting to learn about basic lease accounting. I say that without knowing any advanced lease accounting, just assume it gets more complicated. Would be nice to get excel incorporated in here.
5
Member's Profile
I like how well the course is organized. I'm surprised at how much I need to prep for teaching in my intermediate course. Anyone teaching intermediate accounting would benefit.
4
Anonymous Author
One of the oldest FASB's still around - great refresher - all accounting personnel needs to know the 4 criteria - well covered.
4
Member's Profile
I think that it should state that a calulator is needed to review some of the calculations presented in presentation.
4
Anonymous Author
I do not agree with the answer for question number 4. Is that not the correct answer for a lessor, not a lessee?
5
Anonymous Author
A good course to refresh your know-how about leasing topic. Informative, detailed yet concise. Worth the time.
5
Member's Profile
Good foundational information about accounting for leases that I'll keep in my files for future reference.
4
Member's Profile
Short and to the point. Good presentation. Also good that new proposed accounting rules discussed.
4
Member's Profile
Good overview of lease accounting, and how to determine and treat the different types of leases.
5
Member's Profile
Toughest course I've taken her so far, but very comprehensive and very recent material.
3
Anonymous Author
I was glad that the course had the updated information on the new and upcoming changes.
5
Member's Profile
Simple topic breakdowns in short segments. Good summary and questions prior to test.
4
Member's Profile
Content good however pace could have been a little slower with more examples.
5
Member's Profile
Provided a well rounded explanation and the considerations in lease accounting.
3
Member's Profile
The instructor sped through the course and mostly just read from the slides.
5
Member's Profile
I did not like that the final exam seemed to require a financial calculator.
4
Member's Profile
General review of lease accounting with examples that are easy to follow.
4
Anonymous Author
The pace was a little too fast, instructor basically just read the slides.
3
Member's Profile
Very complicated accounting but a well taught class. Kudos to you.
4
Anonymous Author
Would like more charts and diagrams, very strictly text and tables.
5
Anonymous Author
Very concise and practical presentation. A great refresher course.
4
Member's Profile
Lease accounting is critical for finance staffs of mfg enterprises
5
Member's Profile
The course was short, informative and very well presented.
4
Anonymous Author
Nice course with great illustration of journal entries.
4
Anonymous Author
A lot packed in to a short course. very helpful!
3
Member's Profile
the narrator just seemed to read fro the slides
5
Member's Profile
detailed information and good presentation
5
Member's Profile
Very well explained, practical, succinct.
5
Member's Profile
A lot of material for a one-hour course.
5
Anonymous Author
Good concise presentation of the basics
Anonymous Author
Not much you can do with Lease subject.
Anonymous Author
i have learned through this course
5
Member's Profile
Great course! Very informative.
5
Anonymous Author
Very informative.
2
Member's Profile
Informative course
4
Member's Profile
very informative
4
Anonymous Author
welll presented
5
Anonymous Author
great resource
3
Anonymous Author
Difficult
4
Member's Profile
Good
4
Member's Profile
na
4
Member's Profile
y

Prerequisites

Course Complexity: Intermediate

Prerequisite: Basic proficiency in US GAAP accounting

 

Advanced Preparation: None

 

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 ext. 106, or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  6:58Introduction to Lease Accounting 101
  1:45Overview of Leasing
Lease Accounting 101
  13:44Lessee Accounting
  8:29Lessor Accounting
  2:14Advantages and Disadvantages of Learning
  3:49Lease Straight Lining
  2:55Financial Statement Disclosure
  9:47Financial Impact of New Lease Rules
CONCLUSION
  3:57Summary
CONTINUOUS PLAY
  53:37New Lease Accounting 101
SUPPORTING MATERIALS
  PDFSlides: Lease Accounting 101
  PDFLease Accounting 101 Glossary/Index
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM