Effective December 15, 2021, all non-public companies must adopt new lease accounting rules as described under ASC 842 as explained below:

ASC 842 lease accounting standard

The objective of this standard is to increase transparency and comparability in financial reporting by requiring balance sheet recognition of leases and note disclosure of certain information about lease arrangements. The effective date of the new standard is after December 15, 2021 for non-public companies. Under the new standard, a lessee must recognize right-of-use asset and lease liability on the balance sheet.

The adoption of this ruling is very important especially if you need to present the financial statement reports, compilation, review or audit, to third parties. We strongly encourage you to adopt this ruling as the new year 2022 begins. The lease accounting is somewhat complicated, and you may need training to understand and apply it to the accounting records. In case you need training, we will be available to help at the hourly rates. 

Should you have any questions regarding this matter, please contact us at your earliest convenience.