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
Troy Sheehan, CPA
RSM US LLC
RSM US LLC
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
- Responsible for: Reviewing leases and maintaining lists of executed leases
- Responsible for: Sourcing lease transactions
- 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.