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AMTdirect Blog

AMTdirect Blog

Lease Administration Solutions: Avoid Overpaying on Your Property Lease

Posted on 5/15/20 3:35 PM by The Team at AMTdirect in Lease Administration, in leasing software, in lease administration software, in lease management software

This cautionary tale is about a smart, yet Excel-dependent victim unknowingly overpaying $157,920 on a property lease. Not because of a corrupt landlord or getting tricked into a scam. The significant overpayment was simply due to a lack of data insight and access to information.

Unfortunately, shocking accounts of overpayments on leases occur more often than imagined. In the case referenced above, the lessee used spreadsheets for lease administration and lease accounting, believing these tools to be sufficient. 

Despite Excel being a useful application with countless benefits, the popular software does have limitations which can often lead to costly errors.

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Commercial Lease Administration Software: Choosing the Best One

Posted on 5/12/20 9:26 PM by The Team at AMTdirect in Lease Administration

Until recently, this specific technology typically played a minor supporting role, making only brief appearances in the operations of larger organizations. 

Over the past few years, however, lease administration software solutions have garnered increased attention. They are no longer overlooked as a low priority item or considered a resource that only major players could afford.

Commercial lease administration software is now viewed as a necessary tool for a critical function in the business practices of most companies. 

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Lease Accounting Compliance: Does Your Company Need to Comply?

Posted on 4/27/20 11:19 PM by The Team at AMTdirect in FASB, in Lease Accounting

Do the new lease accounting standards apply to your company? In almost every case, the short answer to that question will be yes. The long answer involves taking a closer look at your contracts.

But, first, exactly which new leasing standards are we talking about? There are three standard-setting accounting boards: the International Accounting Standards Board (IASB), the Governmental Accounting Standards Board (GASB), and the Financial Accounting Standards Board (FASB). Each develops guidance on financial reporting for specific types of entities.

Which standard you need to comply with depends on what type of organization you are. Entities with leasing activities that fall under more than one board’s jurisdiction, will need to report according to the guidelines set forth by each board concerned. 

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COVID-19 & ASC 842 Implementation: How to Continue During the Crisis

Posted on 4/15/20 12:18 AM by The Team at AMTdirect in Lease Accounting, in asc 842

If you’re in the beginning or middle stages of ASC 842 implementation, you may be wondering how to proceed right now. The coronavirus pandemic has hurled economic uncertainty with shared concerns for our health and well-being through astounding obstacles of global shutdowns. 

Private companies were already facing a myriad of challenges to reach compliance in time. As of April 8, however, this financial turmoil has spurred FASB to extend the deadline until 2022. However, considering our currently unprecedented complications, the additional layer of a mandated implementation processes has proved paralyzing.

Witnessing that many lessees and lessors may need to modify leases as a result of the international crisis, FASB voted unanimously to delay the effective dates for its standards on lease accounting and revenue recognition for certain entities, due to the difficulties presented by COVID-19. However, the deadline for compliance will still be fast approaching and continuing with your implementation strategy is essential. 

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ASC 842 Discount Rate: How to Know Which Lessee Rate to Use

Posted on 4/6/20 8:42 AM by The Team at AMTdirect in FASB, in discount rates, in ifrs 16

Determining the appropriate discount rate to use under FASB 842 and IFRS 16 is a little bit like being between a rock and a hard place.

According to the new lease accounting standards, which private companies have until the end of the year to implement in order to be in compliance, lessees need to recognize a lease liability on the balance sheet using either the rate implicit in the lease or their incremental borrowing rate (IBR).

At first glance, this choice appears straightforward enough. But actually this aspect of the new guidance is causing more than just a little confusion and frustration. So much so, that the topic is open for discussion in FASB’s next roundtable meeting scheduled for mid-May. (The meeting was originally slated for early April, but with concerns related to the coronavirus crisis, it was pushed back.)

Before getting into the specifics about what makes this discount rate determination so perplexing, private companies reporting under FASB 842 should be aware that the board offers an alternative in the form of a practical expedient

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ASC 842 Spreadsheet: Is There a Place for Them in Implementation?

Posted on 3/30/20 3:21 AM by The Team at AMTdirect in FASB, in Lease Accounting

Yes, Accountants, there is a place for spreadsheets in your ASC 842 implementation process. 

For some, that bit of news is as welcome as Virginia being assured there is a Santa Claus. Especially with all the headlines declaring lease accounting software as the one and only answer to the challenges of implementing the new lease accounting standards. One article flat out claims the days of using Excel are over!

It’s easy to see why spreadsheets are so beloved. They’re inexpensive, versatile and have been around for ages.

But it’s also understandable that many implementers gave up on spreadsheets in favor of an automated solution. In fact, 72% of public companies that have finished implementation either upgraded an existing system or purchased new lease accounting software. Early on, they realized the magnitude, complexity and significance of the task before them.

Whether you’re reporting under FASB 842, IFRS 16 or GASB 87, private companies and governmental entities can learn valuable lessons from companies that have already completed the transition.

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