An update on accounting for leases
ECLUB NEWS |
For a number of years, clubs have been waiting anxiously for the issuance of a new accounting standard on leases, which is expected to move all leases, except short-term leases, onto the balance sheet. The process for issuing a new accounting standard is rarely straightforward, particularly with a politically sensitive issue like leasing. The Financial Accounting Standards Board, better known by its acronym FASB, recently took another step toward issuing the new rules.
Clubs are advised to consider carefully how the new standard may affect their financial statements, including the impact on existing loan covenants as well as capital funding policies and bylaw stipulations.
The McGladrey team will continue to monitor the progression of this proposal and keep the club industry appraised.
For more on the latest development, read FASB lease proposal moves forward despite dissenting views, which appeared on the Journal of Accountancy website earlier this month.
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