A practical expedient is an accounting policy election allowed by the FASB that provides relief from the burden on financial statement preparers to apply the requirements of an accounting standard. ASC 842 provides for several practical expedients, some providing relief in the initial application and others simplifying ongoing compliance.

The policies and practical expedients companies elect as they make the transition from ASC 840 to ASC 842 have long-term effects on the company’s reporting going forward, so it is important to get input from accountants and advisors with expertise helping construction companies make these critical choices.

This guide offers insights to policy and practical expedient considerations. To learn more, download this Construction Issue Sheet.