How to Choose FASB Lease Standard Compliance Software
As the new FASB regulations roll out, it’s now more important than ever to make the right choice about which software to use to manage your leases.
The Knowledge You Need
As the saying goes, “education is the key to success”. Your organization’s understanding of the new FASB guidelines and the implications to your business will help drive your success. Go through a readiness checklist, do your own cost/benefit analysis, and start tackling the new regulations.
Reduce the Impact
Lease accounting changes are part of a multi-year effort to align U.S. standards with global accounting standards while increasing the transparency of off-balance sheet obligations. For most organizations, the changes create a greater compliance burden and have a material change on corporate financial statements – potentially bringing billions of dollars onto corporate balance sheets, modifying financial ratios and impacting debt covenants.
As such, your business should be considering options to reduce the impact to your organization, and market-leading systems are a key tenant. Accruent has been actively monitoring the changes since they were initially proposed, and has incorporated them into our robust financial engine that manages core financial data for the generation, management and reporting of lease standards.
Accruent’s lease administration software complies with the FASB/IASB changes to ensure customers receive the most up-to-date functionality like lease classification, remeasurements, and audit tracking, as well as reporting in parallel throughout the transition period. Having the ability to manage and report against both the new standard and old standard in parallel eases the burden on your organization.
What’s in a System?
Getting through the migration period, there are key elements that the system must address to ensure tracking and reporting is accurate, and that your CFO can sleep well at night.
In Accruent’s newest release, we have integrated deep functional support for users preparing to transfer their leases to adhere to the new FASB lease accounting standards. The new functionality will allow for a simplified and accurate transition, and help your business prepare and edit your lease content before fully adopting the new standards. A few features include:
- Lease Classification / Classification Test - Determine whether or not a lease is a Finance or Operating lease. Principles based, which allow for organizations to apply their own business-specific rules for classifying the Right-of-Use Asset.
- Initial Measurement / Details Entry - Allows you to capture the information to initially populate the lease accounting schedules for an operating or finance lease. Make modifications such as Type of Lease, Schedule Start/End Date, Initial Direct Costs, and Probable Owed Residual Value.
- Subsequent Measurement / Modifications - Can be added to leases for remeasurement under the new standards. You can also add Additional Costs of Modification at or before Remeasurement Start, Interest Rate Adjustments, Probable Options, Changes in Asset, new Asset Descriptions, and Type of Lease Transaction changes.
- Reporting / GL Export - Included in the first FASB release are Operating and Finance Schedules, Topic 842 Classifications, FASB Audit Log, FASB Details and Modifications, Assets vs. Liability, and Accumulated Liability.
The Right Partner
Find the best partner for your business. We know your organization’s preparedness surrounding the transition to the new FASB lease accounting standards is extremely important and top of mind. Accruent wants to be your partner every step of the way, from the discovery process through the FASB transition period and beyond. Accruent is ready, are you?