LeaseAccelerator announced fully-automated, “push-button” support for transition accounting in the latest release of its software-as-a-service application. As the initial 2019 deadline for the new lease accounting standards approaches, companies are beginning to focus on how they will transition their existing portfolio of operating leases to ASC 842. The ability to provide the necessary comparative reporting and financial disclosures from the Date of Initial Application through the Effective Date is one of the most complicated and important aspects of the transition. Auditors and other users of financial statements will be scrutinizing balance sheets before and after the application of the new standard to understand the impacts.
The latest release of LeaseAccelerator automates many of the most time-consuming calculation and reporting requirements for the transition including:
Transition Accounting Policy Management - LeaseAccelerator enables companies to centrally configure accounting policies for the transition. The application supports practical expedient options for US GAAP such as the “package of three.”
Multiple Transition Accounting Sets of Books – From one dataset, LeaseAccelerator can generate multiple transition ledgers to support financial disclosure requirements for both current and new US GAAP. Ledgers can also be created to support comparative reporting, financial modeling of what if scenarios, and on-going frozen GAAP reporting for regulatory or insurance purposes.
Automated Transition Accounting Calculations - LeaseAccelerator has automated the calculation of true-up adjusting entries and re-measurements for leases changed during the transition period. The application can automatically populate transition ledgers and export journal entries to ERP systems such as SAP and Oracle.
“One of the biggest risks Fortune 500 companies have expressed at recent industry conferences and letters to the FASB is the lack of readiness of software vendors to comply with the new standards,” said Michael Keeler, CEO of LeaseAccelerator. “With the introduction of our new transition accounting features, LeaseAccelerator is the first vendor to offer a complete solution that meets the needs of corporate controllers. Instead of having to wait two to three more quarters for a functional application from their ERP or real estate vendor, our customers can press forward with their implementation and transformation today, thereby de-risking this critical compliance project.”
Developed over a period of ten years by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB), the new lease accounting standards change the way public companies will report leases in their quarterly and annual financial statements. Many real estate and equipment leases, previously only disclosed in the footnotes of investor filings will now be capitalized on corporate balance sheets. The IASB estimates that over $2.2 Trillion of assets and liabilities will transfer onto corporate balance sheets in the coming years. The implementation deadlines for the new standards start in 2019.