“What do you do when it rains?"
The captain answered frankly. "I get wet.”
― Joseph Heller, Catch-22
The forecast is in: Private companies may see their valuations decline as a result of FASB ASC 842 compliance...or lack thereof.
Not exactly what you want to hear at the beginning of a new year.
Nor is it what you expect to happen when you’re conducting business as usual, simply following the rules--as in the new lease accounting standards--and doing your best to be in compliance by the new 2021 deadline.
The good news is that you’re not alone. When it comes to FASB ASC 842 compliance, all private companies face the same catch-22:
Implement the new lease accounting changes to avoid non-compliance and penalties. And consequently face the negative impact reporting under the new standards could have on your company’s valuation.
It doesn’t seem fair.