Free CPE Webinar: Post-Transition Lease Accounting and the Value of Purpose-built Technology
Join the experts at LeaseQuery for a free 1-hour CPE webinar on May 3rd! During this webinar, we’ll review examples of various lease activities, outlining the complexity of the new lease accounting standards beyond initial adoption. Examples will cover the required steps and calculations to account for common transactions, including lease amendments, partial terminations, evaluating for impairment, and accounting for lease abandonments. Register now!
“As someone who started auditing on actual paperwork papers, I'm thrilled to be working at a company whose mission is to automate and simplify accounting through technology. Every day I get to help make accounting a little easier.” - Kiley Arnold, CPA, Andersen Alumnus and current LeaseQuery Employee
Leasequery is the #1 rated lease accounting software working directly with companies needing to comply with the new standards as well as firms helping their clients transition. Here’s a short snippet from our blog: Post-Transition Policy and Procedure Considerations for Lease Accounting
Wondering what’s next after successfully transitioning to ASC 842? Whether a company is using lease accounting software or has minimal leases to account for manually, it’s imperative to have policies and procedures in place going forward. To ensure your post-implementation efforts are seamless, identify all parties involved, refine the process and policies, and monitor the chosen lease accounting solution.
Establish a Lease Accounting Team
Know who will process leases after implementation.
Teamwork is critical to continued compliance with the new lease accounting rules. During transition, you likely identified a point person to lead the implementation and a team to monitor all departments involved. This is also a good starting place to form a post-transition lease accounting team.
Consider the departments or people involved in the end-to-end leasing process. During implementation, organizations were more focused on gathering their complete lease portfolio and reporting the appropriate lease liability and ROU asset on their balance sheet rather than looking to future lease transactions. Now is the time to identify the other individuals, in addition to the accounting team, that will play a major role in the lease accounting process.
Many companies will transition to a centralized process to include multiple departments such as accounts payable, treasury, real estate, or legal. Establishing and identifying a cross-functional team is important to ensure all lease transactions are captured.
Process & Policies Refinement
Evaluating new contracts for leases
It’s critical to account for all leases. Some of those leases are hidden within service contracts or larger agreements, known as embedded leases. The best practice is to ensure processes are established to identify and properly account for them. This process requires investigation and contract analysis. Consider adding these steps to the lease accounting process to aid in identifying embedded leases:
- Assess service contracts within relevant departments.
- Examine contracts with the help of the legal department.
- Review areas of high risk for unrecorded embedded leases
- Data abstraction
- Accurate lease accounting requires capturing the correct data points from contract execution to lease expiration. Sifting through hundreds of pages of lease agreements is challenging but abstracting the correct data is essential as it will impact all calculations from lease commencement to the end of the lease term.
Data abstraction post-implementation should be seamless and build upon the lessons learned during initial implementation. We recommend identifying data points that were previously difficult to retrieve or validate and then building controls around the process going forward.
Overall, it’s imperative organizations consider post-implementation policies and procedures to ensure their lease accounting continues to be in compliance with the new standard going forward. Having a seamless approach includes identifying a lease accounting team, refining your lease accounting process and policies, and planning maintenance activities to ensure ongoing compliance.
LeaseQuery is here to simplify your lease accounting. Learn more at our free 1-hour Post-Transition Lease Accounting and the Value of Purpose-built Technology CPE webinar on May 3rd!