News

Changes in Lease Accounting and Shifting CRE Valuations Needs

March 28, 2022

After many years in the making, FASB’s ASC 842 is finally a reality for private companies in the 2022 tax year.  Whereas in the past, companies could keep long-term leases off the balance sheet, now most leases must be booked: the present value of the future right-of-use in the asset column and the present value of all future lease payments in the liability column.

Inevitably, this tectonic shift in accounting results in a scramble to determine what process changes will be required by ASC 842 and how these should be implemented.

In some instances, the advice of an independent valuation professional can be extremely helpful. For instance:

  • Determining the value of the right-of-use asset
  • Calculating the lease liability
  • Determining whether a sale leaseback should be treated as a sale or a financing transaction
  • Structured finance scenario testing

Capright’s knowledge and experience can help develop a strategy to comply with the valuation components of ASC 842.


For more information, please reach out to:

 

Douglas J. Ticus, MAI, MRICS

 Infinity at Brickell
40 SW 13th Street
Suite 506
Miami, FL 33130
(786) 558-8748
dticus@capright.com