ASC 842 Impact Construction Companies

Lease Accounting – Impact on Construction Companies

Overview of How ASC 842 Impacts Construction Companies

Under ASC 840, the prior leasing standard, construction companies were able to disclose their leases in the financial statement footnotes rather than on their financials. In effect, this practice prevented investors, vendors, government agencies and business stakeholders from having a clear picture of the company’s true financial picture or exposure to risk. The FASB issued ASC 842 to increase transparency and allow interested parties to compare the results of different companies.

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Author:

Mark Barnett, Jr.:

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