Achieve fast compliance and long-term value with Grant Thornton and Visual Lease’s joint lease accounting solution
With the enactment of the new IFRS 16 & ASC 842 (FASB) lease accounting rules, there’s important work to be done, especially for organizations facing a 2019 deadline for compliance with both lease accounting rules (IFRS 16 & ASC 842).
Here’s the to-do list for accounting for leases under the new standards:
- Finding all the records associated with property and asset leases that must be brought onto the balance sheet for compliance with ASC 842 and IFRS 16;
- Classifying leases to understand their treatment;
- Aggregating data in a central repository;
- Selecting a software tool to automate the process of performing calculations, creating journal entries, and producing disclosure reports for IFRS 16 and ASC 842;
- Revising or creating internal processes and controls needed for ongoing accounting and lease management.
Many accounting teams are still shell-shocked from the revenue recognition changes. However, it’s still important to understand that accounting for leases under IFRS 16 and ASC 842 will have a big impact on your balance sheet as well. You need to be sure you’re getting the IFRS 16 and ASC 842 implementation right.
In response, the specialists at Grant Thornton have developed a process and set of integrated tools for end-to-end implementation of the new lease accounting standards. Grant Thornton’s cloud-based data repository, readiness and validation tool – known as LeaseX, helps prepare your data for FASB and IFRS-compliant lease accounting calculations. then, by using the Visual Lease platform, you can
create journal entries and disclosures on your balance sheet and run insightful analytics reports.
What’s more, this joint solution for IFRS 16 and ASC 842 also offers longer term lease management improvements that can have big payoffs for the entire organization.
IFRS 16 and ASC 842 prep: Focus on data collection first
A good lease accounting process starts with data collection, as it takes a great amount of time and effort to gather all of your data for IFRS 16 and ASC 842 compliance.
Once that’s underway, you can work to accomplish the following:
- Talk to stakeholders within your organization to learn more about their lease management needs. Look at the big picture instead of focusing only on accounting requirements for IFRS 16 and ASC 842. Doing that up-front will help you get the most benefit from your lease software solution, potentially making your compliance project a revenue gain instead of a cost.
- Put lease management processes and controls in place to streamline lease accounting compliance going forward, and also to improve decision making and reduce costs. Grant Thornton’s Advisory teams can help you design these processes and controls, while Visual Lease’s flexible management tools can help you implement them.
Streamlining FASB and IFRS data collection and validation with Grant Thornton’s LeaseX
As a leading independent audit, tax and advisory firm, Grant Thornton guides its clients through every step of achieving IFRS 16 and ASC 842 lease accounting compliance. To minimize the data collection burden on organizations, Grant Thornton has created LeaseX.
LeaseX organizes, simplifies and streamlines the process of taking masses of scattered lease data and transforming it into a centralized and complete resource for compliance. The accounting advisory teams at Grant Thornton determine the data fields required to perform the lease accounting calculations under IFRS 16 and ASC 842.
Once that step is complete, the data collected in the LeaseX repository is quick and easy to import into Visual Lease, which performs the lease accounting calculations and creates journal entries and disclosures in your GL/ERP. LeaseX is also compatible with other leasing software.
Here’s what the process of getting your lease data into LeaseX looks like:
- Grant Thornton works with your organization to set up a LeaseX repository that’s customized according to your organization’s structure and requirements.
- Next, the specific data needed about each lease to comply with IFRS 16 and ASC 842 is extracted. You can import this data from an existing repository, have your own team review leases and enter data manually, or have Grant Thornton help you with lease abstraction.
- LeaseX continuously validates the contents of your repository, showing you where data is missing on a lease-by-lease basis.
- Throughout the process, you can monitor your IFRS 16 and ASC 842 readiness progress by seeing how many leases are complete and how many still outstanding.
- You can also monitor your total Right of Use (ROU) asset and liability numbers as you populate your data. Financial leaders will appreciate having that information earlier in the process, rather than having to wait until data collection is complete to understand the impact on the balance sheet.
When your LeaseX repository is complete and validated, it’s a simple matter to export the data to Visual Lease. At that point, you’re ready for IFRS 16 and ASC 842 compliance with the ability to generate journal entries and disclosures.
LeaseX and Visual Lease: Long-term lease accounting and management
Grant Thorton, in alignment with Visual Lease, now offers a joint solution that not only streamlines IFRS 16 and ASC 842 lease accounting compliance, but also helps create smarter and more effective lease management. Integrating these operations creates efficiency, reduces leasing expenses, and drives smarter lease decisions across the organization.
Visual Lease’s cloud-based platform handles every aspect of lease management and accounting for IFRS 16 and ASC 842 and beyond. With all of your lease data in one unified platform, you have a single source of truth and an end-to-end solution that you can always count on to be accurate and up to date.
Get up and running FAST. LeaseX and Visual Lease integrate seamlessly, meaning there’s next to no implementation time. In one click you can import your prepared LeaseX data into Visual Lease.
Seamless systems integration. Visual Lease provides a deep level of integration not only with LeaseX, but also with a wide variety of systems including SAP, PeopleSoft, Power Plan, Workday, NetSuite, JD Edwards, and more than 50 other platforms — empowering you to automate GL journal entries or create cash transactions in your AP/AR system. You can even integrate with multiple GLs.
Visual Lease works the way you work. No two organizations are alike, so a leasing solution tailored to your company and your specific requirements can be invaluable. Visual Lease’s customization possibilities go beyond simply changing field names, and instead allow you to design the system to work according to your processes and controls – and with Visual Lease, you can quickly make those changes yourself.
If you’re still shopping for lease accounting software, find out what you may have overlooked: 7 Things to Consider Before Choosing a Lease Accounting System.