This eBook carries value as the new leasing standard becomes effective in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for:

1. Partnership
Expertise
& IP
Experience People
Tips and Strategies for Estimating
the Lease Term including
Evergreen Leases Under ASC 842
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards
Update (ASU) 2016-02 (“ASC 842”), Leases, which provides new guidelines that change the
accounting for leasing arrangements.

2. Copyright © 2018 Bramasol Inc. www.bramasol.com
2
1. Background 3
2. Lease term under ASC 842 4
3. Determining the Lease Term, Considering Extension, Renewal, and Early Termi-
nation Clauses and Early Termination Clauses
4
4. Evergreen Leases 5
5. Estimation strategies 6
6. Summary 7
About Bramasol, Inc.
CONTENT

3. Copyright © 2018 Bramasol Inc. www.bramasol.com
3
In February 2016, the Financial Accounting Standards
Board (FASB) issued Accounting Standards Update
(ASU) 2016-02 (“ASC 842”), Leases, which provides
new guidelines that change the accounting for leasing
arrangements.
The new leasing standard becomes effective in fiscal
years beginning after December 15, 2018, including
interim periods within those fiscal years, for: • Public
business entities • Not-for-profit entities that have issued
(or are a conduit bond obligator for) securities that are
traded, listed, or quoted on an exchange or an over-
the-counter market• Employee benefit plans that file
financial statements with the US Securities and Exchange
Commission (SEC) For all other entities, it becomes
effective in fiscal years beginning after December 15,
2019, and interim periods in fiscal years beginning after
December 15, 2020. Early adoption is permitted at any
time for all entities.
Background
The primary purpose of the standard is to address
the current accounting treatment of operating leases
which are deemed to be off balance sheet financing
arrangements and are only disclosed via a company’s
financial footnotes in the“Commitments and
Contingencies”footnote.
Upon the adoption of ASC 842, therefore, for every
identified lease, companies will be required to create a
lease liability calculated as the present value of the future
fixed payments and a corresponding asset (“right of use”
asset). The right of use asset will be amortized over the life
of the lease. The income statement will be impacted by
a straight-line lease expense item that would essentially
contain an interest component with the amortization of
the asset being the plug-in order to achieve straight line
lease expense over the life of the lease.
One of the key challenges of adopting the new standard
will be for companies to assess and apply an accurate lease
term especially for evergreen leases under ASC 842.

4. Copyright © 2018 Bramasol Inc. www.bramasol.com
4
Tips and Strategies for Estimating the Lease Term including Evergreen Leases
Under ASC 842
This eBook carries value as the new leasing standard becomes effective in fiscal years beginning after December 15,
2018, including interim periods within those fiscal years, for:
»» Public business entities
»» Not-for-profit entities that have issued (or are a conduit bond obligator for) securities that are traded, listed, or quot-
ed on an exchange or an over-the-counter market
»» Employee benefit plans that file financial statements with the US Securities and Exchange Commission (SEC) For all
other entities, it becomes effective in fiscal years beginning after December 15, 2019, and interim periods in fiscal
years beginning after December 15, 2020. Early adoption is permitted at any time for all entities
Undertaking a proactive implementation program now will not only improve company-wide lease management
capabilities of all asset classes. It will also establish a solid foundation of process discipline, lease accounting and
auditable lease assets to prepare you for compliance with the changes to lease accounting standards coming in 2019.
This eBook mainly covers:
»» Determining the Lease Term, Considering Extension, Renewal, and Early Termination Clauses
»» Evergreen Leases
»» Estimation strategies and much more
Download Now

5. About Bramasol, Inc.
Bramasol is the leader in SAP Leasing, Revenue Recognition and Office of the CFO Solutions
Bramasol is the Leasing leader and a recognized SAP Leasing services partner for companies seeking to comply
with and benefit from the new Leasing standards. Our SAP-certified experts, partnering with SAP and Nakisa, have
lead the way in education and enablement of the new Leasing standards. Even before the announcement of the
new IFRS 16 and ASC 842 standards, Bramasol was working to educate companies on the coming changes and
how to leverage the existing Revenue Recognition work to help with compliance. Our industry leading experience
and focus on Office of the CFO solutions, enables our customers to ramp up quickly and evaluate the options to
not only comply with the standards, but transform finance during the process.
Bramasol is also the Revenue Recognition leader and a recognized SAP Revenue Recognition services partner
for companies seeking to comply with and benefit from the new Rev Rec standards. Our SAP- certified experts,
partnering with SAP, assisted in the majority of SAP Revenue Accounting and Reporting Ramp-Up projects. Driving
successful workshops, Proofs of Concept, and implementation projects throughout the U.S., Bramasol is the go-
to partner with the experience and expertise for companies wanting to leverage SAP Revenue Accounting and
Reporting to comply with ASC-606 and IFRS 15.
Currently, Bramasol is performing implementations and Proofs of Concept/Pilots for additional clients; proving
that Bramasol is a go-to partner with experience and expertise for companies wanting to utilize SAP Revenue
Accounting and Reporting to be compliant with the Financial Accounting Standards Board (FASB) current US
Generally Accepted Accounting Principles (GAAP) revenue recognition standard or the newly announced ASC-
606 and International Financial Reporting Standards (IFRS) 15 addressing the“Revenue From Contracts with
Customers”.
Whether you are looking for a SaaS, hosted or on-premise solution, Bramasol has worked with over 150 clients to
solve business challenges using SAP solutions including SAP Business Suite, SAP Business All-in- One, SAP Business
Intelligence solutions, SAP Business ByDesign®, the SAP HANA® platform and mobile solutions. If you are looking to
build a platform for growth or just be“Rev Rec Ready”, contact us and we can help.
Contact Information:
United States – Headquarters
Bramasol, Inc.
3979 Freedom Circle, Suite 620 Santa Clara, CA 95054
Toll Free (866) 625-9878
Phone +1 (408) 831-0046
Fax (408) 831-0047
info@bramasol.com
About Bramasol, Inc.
Bramasol is the leader in SAP Leasing, Revenue Recognition and Office of the CFO Solutions
Bramasol is the Leasing leader and a recognized SAP Leasing services partner for companies seeking to comply
with and benefit from the new Leasing standards. Our SAP-certified experts, partnering with SAP and Nakisa, have
lead the way in education and enablement of the new Leasing standards. Even before the announcement of the
new IFRS 16 and ASC 842 standards, Bramasol was working to educate companies on the coming changes and
how to leverage the existing Revenue Recognition work to help with compliance. Our industry leading experience
and focus on Office of the CFO solutions, enables our customers to ramp up quickly and evaluate the options to
not only comply with the standards, but transform finance during the process.
Bramasol is also the Revenue Recognition leader and a recognized SAP Revenue Recognition services partner
for companies seeking to comply with and benefit from the new Rev Rec standards. Our SAP- certified experts,
partnering with SAP, assisted in the majority of SAP Revenue Accounting and Reporting Ramp-Up projects. Driving
successful workshops, Proofs of Concept, and implementation projects throughout the U.S., Bramasol is the go-
to partner with the experience and expertise for companies wanting to leverage SAP Revenue Accounting and
Reporting to comply with ASC-606 and IFRS 15.
Currently, Bramasol is performing implementations and Proofs of Concept/Pilots for additional clients; proving
that Bramasol is a go-to partner with experience and expertise for companies wanting to utilize SAP Revenue
Accounting and Reporting to be compliant with the Financial Accounting Standards Board (FASB) current US
Generally Accepted Accounting Principles (GAAP) revenue recognition standard or the newly announced ASC-
606 and International Financial Reporting Standards (IFRS) 15 addressing the“Revenue From Contracts with
Customers”.
Whether you are looking for a SaaS, hosted or on-premise solution, Bramasol has worked with over 150 clients to
solve business challenges using SAP solutions including SAP Business Suite, SAP Business All-in- One, SAP Business
Intelligence solutions, SAP Business ByDesign®, the SAP HANA® platform and mobile solutions. If you are looking to
build a platform for growth or just be“Rev Rec Ready”, contact us and we can help.
Contact Information:
United States – Headquarters
Bramasol, Inc.
3979 Freedom Circle, Suite 620 Santa Clara, CA 95054
Toll Free (866) 625-9878
Phone +1 (408) 831-0046
Fax (408) 831-0047
info@bramasol.com