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Track 11 of 19 · Specialized

Leases under ASC 842 and credit losses under ASC 326

Lease accounting under ASC 842 (identification, classification, discount rates, measurement, modifications, lessor accounting and common-control arrangements) and the current expected credit loss model under ASC 326, with the audit procedures for both estimates.

14 lessonsAbout 59 minASC 842 · ASC 326 · ASU 2016-02 · ASU 2016-13 · AU-C 540
0 of 14 complete
Syllabus

For: Audit staff and seniors testing leases and allowances, and preparers who maintain lease schedules and reserve models.

  1. 01ASC 842 and ASC 326: what changed and why auditors treat them togetherWhy the lease and credit loss standards share a track: both put estimates on the balance sheet, both reach every private company, and both drive audit risk.4 min · worked example · 3 self-check questions
  2. 02Scope and identifying a lease: identified asset, control and embedded leasesHow to decide whether a contract is or contains a lease under 842-10-15: the scope exclusions, the identified asset test, substitution rights and right to direct use.4 min · worked example · 4 self-check questions
  3. 03Lease term and the five classification criteriaHow to set the lease term with renewal and termination options, then apply the five 842-10-25-2 criteria that decide finance versus operating for lessees.4 min · worked example · 3 self-check questions
  4. 04Lessee initial measurement and the discount rate, including the private company risk-free electionWhat goes into the lease liability and ROU asset at commencement, how to pick the discount rate, and how the risk-free election by asset class works after ASU 2021-09.4 min · worked example · 3 self-check questions
  5. 05Short-term leases, component expedients and common control arrangements under ASU 2023-01The short-term lease exemption, combining lease and nonlease components, and the ASU 2023-01 relief for common control leases and their leasehold improvements.4 min · worked example · 3 self-check questions
  6. 06Subsequent measurement for lessees: finance versus operatingHow the ROU asset and liability roll forward for finance and operating leases, why expense patterns differ, and when the lessee must remeasure the liability.4 min · worked example · 3 self-check questions
  7. 07Lease modifications: separate contract or remeasureHow to account for a lease change under 842-10-25-8 through 25-13: when a modification is a separate contract, and how to remeasure the liability when it is not.4 min · worked example · 3 self-check questions
  8. 08Lessor accounting: sales-type, direct financing and operating leasesHow a lessor classifies a lease, measures the net investment and selling profit, and handles collectibility, operating lease income and modifications.5 min · worked example · 4 self-check questions
  9. 09Auditing leases: completeness, measurement and disclosureAn audit approach for ASC 842: finding unrecorded and embedded leases, testing term and discount rate as estimates, recomputing balances and tying disclosures.4 min · worked example · 3 self-check questions
  10. 10CECL scope and the expected credit loss modelWhat Subtopic 326-20 covers, what it excludes, and the measurement principles: lifetime losses, past events, current conditions, forecasts and reversion.4 min · worked example · 4 self-check questions
  11. 11Pooling and estimation methods under CECLHow to pool assets by shared risk characteristics, evaluate outliers individually, and choose among loss-rate, roll-rate, PD, DCF and aging methods.5 min · worked example · 4 self-check questions
  12. 12Trade receivables under CECL and the ASU 2025-05 expedientApplying CECL to trade receivables with an aging matrix, and how the ASU 2025-05 practical expedient and the non-PBE subsequent collections election work.4 min · worked example · 3 self-check questions
  13. 13AFS debt securities under 326-30 and purchased credit-deteriorated assetsHow credit losses on available-for-sale debt securities differ from CECL, and how the gross-up method sets amortized cost for PCD assets.5 min · worked example · 4 self-check questions
  14. 14Auditing the CECL allowance under AU-C 540 and tying the disclosuresHow to audit the allowance for credit losses as an estimate under AU-C 540 (SAS 143): risk factors, the three approaches, bias, and disclosure tie-out.4 min · worked example · 4 self-check questions
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