Has anyone dealt with the TAX IMPACTS OF THE NEW LEASE ACCOUNTING STANDARD ASC 842 ?
I have a C Corp client listed a 5 -year operating lease as ROU Assets ( right-of-use asset ) and depreciated over 5 years. say $500K ROU Asset and depreciated at $100K / year.
What is the proper way to handle this from tax purposes? Here is what I plan to do:
1. Reclassify $100K depreciation as Lease expense;
2. Depreciation on ROU Asset causes a DTL; Reclassified Lease causes a DTA, so both net to $0
3. Reclassify the ROU Assets on the Sch L to Long Term payable ( ?)
Here are two articles I found but I still felt confused after reading it
https://www.marcumllp.com/insights/tax- ... rd-asc-842
https://rsmus.com/content/dam/mcgladrey ... sc_842.pdf
Thanks in Advance for your input.