As companies kick off their third quarter, we turn our attention back to the new leases standard to look at a key day 2 accounting issue: remeasurement. In this episode, Jillian Pearce joins Heather Horn to take a closer look at some of the more complex questions; topics include: 

2:27 - The new rules of modifications. We first identify what a modification is and then look at some of the changes to the framework for how companies should evaluate them. 

7:23 - Other types of remeasurements. Events other than formal lease modifications can result in the need to remeasure. Jillian provides examples of the types of events that may trigger a remeasurement and addresses related commonly asked questions.

11:10 - You have a modification or a remeasurement event. Now what? Jillian highlights how to think about the resulting reassessments, reallocations, and recalculations.   

13:44 - Accounting for right of use assets. Jillian helps us think through remeasurement adjustments to the right-of-use assets.

15:20 - Processes and controls. What types of monitoring and ongoing controls should companies have in place? Jillian highlights the holistic processes companies should  think about to make sure that changes that may impact lease accounting are communicated to the right people at the right time. She then wraps up by providing additional resources for understanding the new rules.

About our guest

Jillian Pearce is a Director in PwC's National office, providing advice on technical accounting issues to clients. She has over twelve years of experience performing audits of public and nonpublic entities, specializing in the power and utilities industry.

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].