In their adoption of ASC 842 (Leases), companies in the travel and hospitality industry debated the...

 

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In their adoption of ASC 842 (Leases), companies in the travel and hospitality industry debated the question of whether hotel rooms are leases. Apply the research process to this question as follows: a. Research the industry-what are some companies that own or operate hotels? b. Locate disclosures from one of these companies to get a better understanding for how they describe hotel room rentals (both from a business and an accounting perspective). Review, for example, the latest 10-K for one of the companies you identified. c. Define the research question. d. Stop and think: What answer makes sense to you, and what are the potential implications of this judgment? e. Search for guidance. What guidance does the Codification offer that might address this issue? f. Analyze and document the alternatives. g. Conclude and justify your position. In their adoption of ASC 842 (Leases), companies in the travel and hospitality industry debated the question of whether hotel rooms are leases. Apply the research process to this question as follows: a. Research the industry-what are some companies that own or operate hotels? b. Locate disclosures from one of these companies to get a better understanding for how they describe hotel room rentals (both from a business and an accounting perspective). Review, for example, the latest 10-K for one of the companies you identified. c. Define the research question. d. Stop and think: What answer makes sense to you, and what are the potential implications of this judgment? e. Search for guidance. What guidance does the Codification offer that might address this issue? f. Analyze and document the alternatives. g. Conclude and justify your position.