How to Account for Cloud Computing Arrangements Under US GAAP: An Overview

by Justin Shemaria | Nov 13, 2020

1. Effective date of ASC 350-40 2. The need for clarity Capitalizable vs. non-capitalizable 3. Updates to ASC 350-40 Capitalizable vs. non-capitalizable software costs 4. Initial measurement and subsequent measurement Initial measurement Subsequent measurement 5....

Operating Lease Accounting under the New Standard, ASC 842: Full Example and Explanation

by Justin Shemaria | Sep 11, 2020

1. Operating leases defined 2. New treatment and changes 3. Identification 4. Is lease capitalization required for all? 5. New example under ASC 842 Lease agreement details Determine the lease term under ASC 840 Determine the total lease payments Prepare the straight...

Straight-Line Rent Calculation for Leases under US GAAP

by Justin Shemaria | Sep 4, 2020

1. Straight-line rent calculations for leases: ASC 842 2. Straight-line rent calculation example Steps to calculate straight-line expense annual rent escalation 3. Summary 4. Related articles Straight-line recognition is one of the most commonly used accounting...

How to Calculate the Present Value (PV) of Future Lease Payments in Excel

by Justin Shemaria | Jun 5, 2020

1. Present value of lease payments explained PV (Present Value) vs. NPV (Net Present Value) Minimum lease payments and future lease payments 2. How to calculate lease payments using Excel in 5 steps 3. Present value calculator 4. Summary 5. Related articles Present...

Lessor vs. Lessee Explained and Full Lessor Accounting Example: Finance Lease under GASB 87

by Justin Shemaria | Apr 2, 2020

1. Lessor vs. lessee Lessor definition Lessee definition Lessee vs. lessor accounting 2. Lessor accounting: Full example of a finance lease under GASB 87 Lessor vs. lessee In accounting, the terms “lessor” and “lessee” are used to identify the different parties...