The Window for Companies – Public or Private – to Obtain a Compliant and Trusted FASB/IASB Solution is Rapidly Closing.
The Financial Accounting Standards Board (FASB) provided a compelling event for many popular (but less experienced) software companies to jump on the bandwagon. These software solutions built to satisfy the updated FASB regulations fall into one of two buckets:
- Software just getting started, but not tested to meet all requirements and at scale
- A well-oiled machine ensuring FASB compliance
So, What Determines Success in Becoming FASB compliant?
- Minimize the risks associated with compliance.
- Work with accountants and auditors to streamline business controls.
- Choose the right provider for a FASB lease accounting software with proven results.
Why is FASB Lease Accounting Compliance So Important?
Besides the obvious like avoiding costly fines, there are many other benefits to your business operations that come out of the tasks associated, including:
- Improved cost analysis and containment.
- Expanded and newly created KPIs that will indicate future actions.
- Improved tracking of assets and their individual allocations.
- Enhanced data for a better understanding on how to act on profitable and unprofitable leases using the inherent lease valuation approach of the standard.
- Motivation and business case to consolidate all leases in the firm, at a minimum informally or hopefully formally in a Lease Center of Excellence.
How to Choose a FASB/IASB Software Solution to Achieve Compliance
Use this proven formula for success: Experience + Education + Timeline = FASB Compliance
Experience: The FASB changes have a substantial impact on the way real estate and equipment leases are recorded. Make sure your chosen solution has adopted and validated that they are using the most updated FASB rules and regulations. If they are just getting started or did not immediately start actively monitoring changes, they're not the right solution for you.
Education: The right compliance solution partner will help you determine your organization’s goals, highlight the implications of the compliance guidelines, and help you know how these implications directly affect your business.
Timeline: For the best chance at quick and complete compliance you need to understand where you are in the process and what is the best next logical step to take. Here are some additional considerations:
- Have you previously purchased a solution?
- Are you waiting on implementation of some kind?
- Are you in the middle of an active RFP process?
- Are you just now learning about the updated regulations?
What Are Some Key Factors to Look for in FASB Lease Accounting Software?
- Ensure that the partner you choose has a proven history of successful data migration and implementation.
- Determine that the implementation timeline and process required by the solution will meet the compliance outline set forth by FASB.
- Verify that the solution’s calculations have been certified by an independent, third-party accounting firm.
- Check that the solution meets the FASB/IASB requirements and goes beyond compliance to meet the additional needs of your business.
Accruent’s real estate and equipment lease accounting solution, Lucernex, enables our customers to ensure full FASB compliance, mitigate risk, and gain transparency into their entire lease portfolio. And Lucernex is third-party verified by Skoda Minotti.
Get more information today or request a demo to see how we can help get you FASB compliant!