With FASB compliance less than a year away, Visual Lease is doing all we can to smooth the transition — including delivering a new lease accounting update designed to make it even easier to meet the requirements of ASC 842 and IFRS 16.
What’s new in our lease accounting update?
Visual Lease FASB 2.0, our enhanced Lease Accounting module, provides a range of new tools for displaying multiple lease views and running a variety of calculations, for the ultimate in accounting flexibility. For example, our lease accounting update enables you to:
- Pick a particular calculation or run parallel entries for ASC 840, ASC 842, IAS 17, and IFRS 16
- Run hypothetical calculations and preview them side by side for comparison, such as different interest rates or lease dates
- Create different calculations and reporting for different dates or different locations
- Automatically compute and reverse journal entries when lease terms change — or even end calculations and remove old assets from your balance sheet entirely
With the new FASB lease accounting rules now requiring all lease assets and expenses to be accounted for, Visual Lease’s enhanced module empowers you to create compliance-related reporting from your accounting data, for a more complete picture of your lease profile and related financial obligations.
For instance, you can look back on 2 years’ worth of journal entries and automatically pull data from your balance sheet for footnotes in Qualitative Disclosure Reports. Forecast what the next 5 years of lease obligations will look like and generate reports on all types of lease expenses — operating, short- and long-term, variable, and sub-lease, as well as finance.
For companies that include different entities, you can create drill-down Disclosure Reports according to different entities, regions, countries, lease terms, or whatever criteria you need. Our lease accounting update also includes enhancements for visualization of short-term versus long-term lease liabilities and for handling IFSR-only portfolios.
Learn more from this helpful lease accounting guide: How to Implement Lease Accounting Technology: Steps to Ensure a Smooth Transition to ASC 842/IFRS 16
What are some enhancements in FASB 2.0?
Our lease accounting update not only sets you up for compliance with new FASB lease accounting rules on Day 1 — it also provides enhancements that help you handle complex lease scenarios on Day 2 and beyond.
Flexible Classifying & Calculating
Added audit trail and override capabilities give an administrator the ability to change the bright lines in Capital Lease Testing, to adjust how a lease is classified and how journal entries are done.
For instance, you can override the default values for the Lease Test Threshold amounts (normally 75% of Useful Life and 90% of Fair Market Value) to tweak those values (e.g., set the threshold to 88%) to be sure leases are properly classified. Our lease accounting update also expands the FASB schedule and calculations with additional criteria, such as Deferred Rent and Prepaid/Accrued Rent balances. The addition of a new Journal Entries section allows FASB schedule data to be viewed in Journal Entry form.
Easier Currency Conversion
A number of enhancements to Visual Lease help you handle complex currency conversions over multiple periods with greater ease and agility. Integration with foreign exchange tables allows third-party data to be used in the system, for tasks such as tracking changing currency rates over time and allowing customer databases to import rates from Visual Lease’s reference tables on demand.
Secure Single Sign-on
Our lease accounting update strengthens our already robust security features with the addition of secure single sign-on. Utilizing user authentication from Federated Security Sources, this capability enables users to log on once for secure access and the ability to work with Visual Lease and accounting, general ledger, and ERP systems simultaneously.
Managing User Workflow, Alerts, & Notifications
The lease accounting update adds tools for managing user approval to tasks, such as allowing specific users to import lease financial entries or hiding project modules from specific users. We’ve also improved lease alerts and notifications by including full contact information for alert recipients — making it easier to identify the alert targets — and adding a quick search capability when selecting targeted organizations.
Enhancements to Financials
Adding a new field for Cost per Rentable Area, our lease accounting update allows this to be included as a recurring, computed cost and adjusted when there are changes in lease terms; Cost per Rentable Area has also been added to ad hoc and abstract reporting capabilities. Enhancements to financials include:
- Forecast calculations on Multiple Lease Update for budgeting/projections
- Ability to filter entries for the financial types used on each lease and for options such as forecasts and GL entries
- Improved searching of the full hierarchy of financial categories
- Mapping to other financial categories for forecasting and straight line rent automation functions
What will the near future bring?
The new FASB lease accounting rules are designed to align U.S. standards with global accounting standards while increasing transparency in financial reporting by 2019. FASB 2.0 from Visual Lease is designed to help you meet those requirements with speed and ease; additionally, it is compliant with IFRS 16, the new international standard.
Are you ready for compliance? Learn more:
FASB Lease Accounting Changes: How to Assemble Your Readiness Team
Get the Best Lease Accounting Software by Comparing Price & Value
Moving forward, we will continue to support these efforts with regular releases — so we encourage you to return to this space frequently to read about the latest lease accounting update from Visual Lease and learn more about how we can help you make the transition.
Want to see for yourself? Request a demo