FASB ASC 842

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ID Status Date Public/Private Industry AHACPA Contact
#18006 Closed public Multifamily Les Sparks
Customer Reply

Hello,
Do you you have any guidance on how the new lease standard FASB ASC 842 will impact and affect Section 811 or Section 202 HUD Projects. These Projects have annual leases with their tenants and renew the leases annually based on recertification.
Does the project (Lessor) need to adopt the lease standard or do they qualify under the short term lease exemption. The Project has capital advance or mortgage but is only contingently liable if they do not maintain the Project for the specific purpose for 15 years in accordance with the agreements.
Les Sparks

Christabel, as with the normal multifamily leases, Section 202 and 811 leases do not need to be considered under the new lease standard. They are excluded being 12-month leases with no transfer of ownership. However, this does not mean that the project does not need to implement the new standard. Likely, the biggest change affecting us is the bad debt expense issue. Under the standard, bad debts should be recorded as an offset to revenue. See the attached memo, footnote disclosure example.

 

Les Sparks
AHACPA | 459 N 300 W #10 | Kaysville, UT 84037 | Phone: 801-547-0809
Support Center  | Send a Secure File | AHACPA Newsletter | Twitter

 

From: AHACPA Support <support@ahacpa.org>
Sent: Wednesday, February 22, 2023 5:02 PM
To: les@ahacpa.org
Subject: FASB ASC 842
Customer Reply

Les,

 

Thanks for you email response to my query. I will review the info you sent over and revert back with any further questions/clarifications I may have.

 

On another note, I am trying to locate the Non-profit and profit motivated sample financial statements for 2022 audits that you would publish annually on your website but can’t seem to locate it. Can you point me in the right direction
or email me the same.

 

I appreciate your help.

 

Thanks,

Christabel

Christabel Valladares, CPA
| Partner

 

200 Valley Road, Suite 300 | Mt. Arlington, NJ 07856

973-298-8500 Phone | 973-298-8501 Fax

cvalladares@nisivoccia.com
| www.nisivoccia.com

 

From: Les Sparks <les@ahacpa.org>
Sent: Wednesday, February 22, 2023 9:16 PM
To: Valladares, Christabel <cvalladares@nisivoccia.com>
Cc: AHACPA Support <support@ahacpa.org>
Subject: RE: FASB ASC 842

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