Overview
What this challenge is about.
Calculate ASC 842 lease terms, present values, and ROU assets for a restaurant chain. Deliver a transition memo and journal entries to earn a verifiable certificate.
The scenario
Taco Fresco is a 50-location fast-casual Mexican restaurant chain in the southwestern US. It leases all its restaurant spaces, with typical initial terms of 10 years and two 5-year renewal options. Rent escalates 2% annually. The company's incremental borrowing rate is 5%.
The Brief
What you'll do, and what you'll demonstrate.
How should Taco Fresco transition its lease portfolio from ASC 840 to ASC 842, including determination of lease term and calculation of ROU assets and liabilities?
Earning criteria — what you'll demonstrate
- Apply ASC 842 lease accounting principles to a portfolio of leases
- Determine lease term including renewal options based on reasonable certainty
- Calculate present value of lease payments using incremental borrowing rate
- Prepare transition journal entries and disclosures
Program Fit
Where this fits in your program.
Sharpens the same skills your degree expects you to demonstrate.
Aligned coursework coming soon.
Skills
Skills you'll demonstrate.
Each one shows up on your verified credential.
- Lease Accounting
Apply lease accounting to solve real industry problems and demonstrate production-level capability.
- Asc 842
Apply asc 842 to solve real industry problems and demonstrate production-level capability.
- Present Value
Apply present value to solve real industry problems and demonstrate production-level capability.
- Financial Reporting
Apply financial reporting to solve real industry problems and demonstrate production-level capability.
Careers
Career paths this challenge builds toward
Completing this challenge demonstrates skills that transfer directly to these roles: