A general understanding of leasing rules.

Course Description

The recently issued lease standard represents a radical departure from previous lease guidance; many financial statements will recognize potentially significant assets and liabilities for the first time. Implementing FASB's New Lease Standard: A Hands-On, How-To Guide is for industry and public preparers and accountants who need to understand how the new leasing rules will affect their key accounting numbers. This course will help participants understand how the new standard will affect their company or clients and the practical implementation strategies that will ease the burden of transition.


Ray Thompson, CBA, CFM, CMA

Dr. Ray Thompson, CBA, CFM, CMA, is an emeritus associate professor of accounting and finance at the University of Pittsburgh. He served as department head at the University of Pittsburgh at Johnstown (UPJ) campus for over 25 years. He was the associate director of UPJ’s Entrepreneurial Development Assistance Project, where he was involved in financial consulting and assisting in preparing loan proposals for small business start-ups. He has taught in graduate and undergraduate business programs in Europe, Africa, and the United States.

Ray received his BS and MS degrees in economics and systems dynamics from the University of Bradford in the United Kingdom, his MBA in accounting from Xavier University in Ohio, and his PhD in business administration from Nova University. Ray is also certified in financial management and is a certified management accountant (CMA), a certified business appraiser (CBA), and holds the accredited valuation analyst credential from the National Association of Certified Valuators and Analysts (NACVA). He recently became certified in IFRS though the Institute of Chartered Accountants in England and Wales.

Ray teaches at Western CPE conferences and produces both self-study and webcast courses as well. He also authors and conducts professional development seminars for Fortune 500 and international corporations, multinational financial institutions, state CPA societies, and CPA firms throughout the United States. In addition, Ray provides business valuation services and consults with accounting firms and sole practitioners on a range of accounting issues in the area of valuation. He’s a faculty associate member of the AICPA and the Pennsylvania Institute of Certified Public Accountants (PICPA) and a member of the Financial Reporting Faculty of ICAEW.

Course Specifics

Aug 23, 2018
A general understanding of leasing rules.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Distinguish between capital and operating leases.
  • Identify the current approach to accounting for leases.
  • Identify changes to the approach for lease recognition under the new standard.
  • Distinguish between more-likely-than-not and reasonably-assured thresholds for lease recognition.

Chapter 2

  • Explain how balance sheets will change as a result of ASU 2016-02.
  • Describe the effect on EBITDA of adopting ASU 2016-02.
  • Contrast FASB and IASB's approach to income statement recognition for leases expense.

Chapter 3

  • List the five steps involved in analyzing lease contracts using the control model.
  • List the categories of leases that are exempted from ASU 2016-02.
  • Distinguish between substantive and protective rights when applying the control model to lease contracts.
  • Explain how the concept of substitutability affects the identification of specific, identified assets.
  • List the criteria for distinguishing between finance and operating leases in lessee accounting.
  • Describe FASB's three practical expedients for separating capital from operating leases.
  • Contrast the pattern of expense recognition for capital and operating leases.
  • List the amounts a lessee should include in calculating expected payments.
  • Explain which leases are eligible for the accounting policy expedient to expense short-term leases.
  • Describe the criteria for separating lease payments from service arrangements.

Chapter 4

  • Distinguish between sales and direct financing type leases and determine the appropriate recognition of revenue in various situations.
  • Contrast the balance sheet presentation for sales and direct financing leases.

Chapter 5

  • List the implementation dates for ASU 2016-02 for public and non-public business entities.
  • Describe the modified retrospective transition process involved in implementing ASU 2016-01.

Chapter 6

  • Explain the transition arrangements for specialized lease situations such as sub-leases and leveraged leases.
  • Define a sale-leaseback transaction.

Table of Contents

Chapter 1 – Overview

Learning Objectives

Current Leasing Guidance

Why are Leases So Complicated?


Major Changes at a Glance

Chapter 1 – Review Questions

Chapter 2 – How Will Companies Be Affected?

Learning Objectives

Wide-Ranging Effects

Impact on Financial Ratios

Chapter 2 – Review Questions

Chapter 3 – Lessee Accounting

Learning Objectives


1.       Is there a contract?

2.       Is there a specific identified asset?

3.       Does the lessee have the right to the benefits from the asset?

4.       Does the lessee have the right to direct the asset’s operation?

5.       Did the lessee design the asset for its exclusive use?

Lease Recognition

Lease Payments

Accounting for Lease-Specific Contractual Provisions

Renewal, Termination, and Purchase Options

Variable Lease Payments

Termination Penalties and Residual Value Guarantees

Leases and Service Contracts

Lease Reassessment

Presentation and Disclosure


Chapter 3 – Review Questions

Chapter 4 – Lessor Accounting

Learning Objectives

Operating Leases

Presentation and Disclosure

Chapter 4 – Review Questions

Chapter 5 – Effective Date and Transition

Learning Objectives

Chapter 5 – Review Questions

Chapter 6 – Additional Issues in Lease Accounting

Learning Objectives

Lease Guidance Eliminated


Sale/Leaseback Transactions

Related Party Leases


Chapter 6 – Review Questions

Review Question Answers and Rationales



Qualified Assessment

Answer Sheet

Course Evaluation

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