When a company is transitioning from ASC 840 to ASC 842, there will likely be a deposit related to the lease. This treatment is especially applicable when using the Effective Date Transition method.
The accounting treatment concerning deposits does not change regardless of whether you're accounting under ASC 840 or ASC 842. So how do you handle deposits when you're transition to ASC 842 in Cradle?
You have two options:
If you've already accounted for the deposit, you can continue to account for the deposit outside of Cradle.
You can input the deposit in Cradle. Remember, you will want to remove the journals that result in recognition of the deposit because you've already accounted for this. The benefit now is you will be able to track your deposits in Cradle.