Lease Accounting Memo

Use this Lease Accounting Memo Template as a guide when assessing the impact of ASC 842 on your business.

Purpose of a Lease Accounting Memo

a lease accounting memo is to document and communicate the company’s approach to implementing and complying with lease accounting standards, such as ASC 842 or IFRS 16. It typically outlines key aspects, including:

  • Scope and Impact Assessment
  • Policy Decisions
  • Process and Controls
  • Key Judgments and Assumptions
  • Financial Disclosures

Frequently Asked Questions:

What is a lease accounting policy memo?

A lease accounting policy memo outlines an organization’s policies and procedures for lease accounting under ASC 842 and IFRS 16, detailing how leases will be recognized, measured, and disclosed in financial statements.

Why is it important to prepare before writing the memo?

Preparation involves understanding the relevant lease accounting standards and gathering insights from various departments to ensure comprehensive coverage of lease classifications and compliance with new regulations.

What key components should be included in the memo?

The memo should cover lease classification criteria, asset classes, calculations for lease liabilities, disclosures required by the new standards, and reporting frequency, providing clarity on each aspect of lease accounting.

What steps should be taken after drafting the memo?

Once the memo is finalized, it should be approved by internal stakeholders, distributed to relevant parties involved in lease accounting, and periodically reviewed and updated to reflect any changes in lease accounting standards.