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
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.