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Lease Accounting: How to Ensure Reliable, Effective Implementation and Adoption

By October 6, 2022Lease Accounting

On-demand webinar summary

Businesses commonly struggle to adapt the new methodologies and technology to achieve lease accounting compliance. In fact, one-third (33%) of private companies are still not fully prepared to transition to ASC 842.

Our recent webinar, Lease Accounting: How to Ensure Reliable, Effective Implementation and Adoption, lease accounting experts from Visual Lease and RSM shared insight into:

  • Proven processes and tools to accelerate your progress
  • How to get started now and reduce the risk of error
  • Necessary, critical tips to ensure accurate lease accounting data

To learn more, read the summary below or view the on-demand webinar. 

What’s required to adopt ASC 842 

To be successful in your lease accounting project, you must dedicate enough time, effort and resources.    

“There are a lot of details that go into having a successful implementation. The key one is project management of all the different work streams that go into your Day 1 activities,” said Joe Fitzgerald. 

The main activities you’ll need to track are lease data collection and lease technology implementation. Doing this right ensures your business has a comprehensive lease portfolio, reliable lease data and accurate reports.  

Lease data collection and abstraction is particularly time-consuming, but essential to have a full picture of your leased assets. You will need to inquire with identified departments that utilize leased assets, enter into lease transactions and/or house lease agreements. These departments typically include corporate IT, G&A, legal, procurement and tax. 

  • Corporate IT
    • Responsible for: Leased computer and telephone equipment
  • General and Administration (G&A)
    • Responsible for: Leased copiers, cars, remote office locations, break room equipment
  • Legal
    • Responsible for: Reviewing leases and maintaining lists of executed leases
  • Procurement
    • Responsible for: Sourcing lease transactions
  • Tax
    • Responsible for: Overseeing preparation of personal property returns, which typically requires reporting leased assets

Considerations to maintain ASC 842 compliance 

Organizations often experience similar concerns related to sustaining lease accounting compliance post-initial adoption (Day 2). These commonly include: 

  • Resource constraints,  
  • Ongoing lease maintenance (reassessment, modifications and remeasurements), 
  • Ongoing collection and abstraction of new leases, 
  • Review of service contracts and embedded leases, 
  • And more. 

To address these concerns, organizations may choose to outsource their Day 2 lease accounting efforts, rather than keeping the work in-house. Both options present pros and cons related to effort, cost, risk and organizational impact.  

For a detailed breakdown relating to the pros and cons of outsourcing vs. insourcing your lease accounting, view the on-demand webinar: Lease Accounting: How to Ensure Reliable, Effective Implementation and Adoption. 

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