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AMTdirect Insights Blog

AMTdirect Insights Blog

ASC 842 Adoption Date: Why Private Companies Shouldn't Wait

Posted on 11/4/19 7:00 AM by Taft Tucker in FASB

The big news on the street is the delay by the FASB of the ASC 842 adoption date.

The governing body stated this deadline change will give companies more time to deal with the complexities of the transition. It will also give the FASB a chance to find out more about what went wrong for public companies. This includes digging into where there was unnecessary cost and where the standards can be improved.

A cheer went up for this extended deadline from companies just starting to look into lease accounting compliance and those in the beginning stages of implementation. After all, the delay gives laggers more time to create an adoption plan, staff adequately, and select lease accounting software. 

But it’s also created a huge blind spot when it comes to lease accounting technology.

It’s a problem that’s not talked about enough in the industry, but for those companies who wait to start implementation, the writing is on the wall.  

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How FASB ASC 842 Mistakes Spell Disaster for Bank Lending to Private Companies

Posted on 10/28/19 7:00 AM by Taft Tucker in Lease Accounting

The increased transparency and comparability the FASB was going for with the new lease accounting standards may have backfired. As public companies discovered, transitioning away from routine leasing processes to ASC 842 has ushered in unforeseen nuances. 

These have spiraled into complexities that have severely - and in most cases, negatively - impacted the amount, timing, and uncertainty of cash flows.

In answer, FASB halted compliance deadlines on all of its major rulings, including ASC 842. 

But that doesn’t negate the fact that the impacts to companies who’ve already finished implementation are far reaching. It doesn’t leave private companies off the hook, either. With just a year to implement, the onus is even heavier to get the standards right. 

And when even the slightest mistakes in reporting for the new accounting standards can force auditors to make you file a financial restatement, your company can suffer the consequences in a variety of ways.

The biggest of these is making banks reconsider lending to you.

Because this one aspect alone could spell disaster for your company, we’re digging into what financial restatements are, their unforeseen negative effects on bank lending, and how to avoid them when implementing the new accounting standards.

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FASB ASC 842: Why You Should Care

Posted on 10/21/19 7:00 AM by Taft Tucker in FASB

When it rains it pours.

Or so it seems when it comes to FASB ASC 842 and its IASB and GASB counterparts.

There seems to be a flood of issues from implementation of the new accounting standards. And most industry pros are pointing the finger at the extreme complexity of the rules.

Although there’s plenty of written guidance about ASC 842 in particular, it’s not nearly as thorough as it could be. For example, with ASC 606, the FASB held eight meetings over two years where 100 different questions or issues were discussed and documented in 60 different memos on the website. 

ASC 842 did not experience the same fervor of activity or documentation.

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ASC 842 Changes: Death by Financial Restatement

Posted on 10/14/19 7:00 AM by Taft Tucker in FASB, in Lease Accounting, in GASB

The debate over the new FASB lease accounting standards is heating up.

A slew of complaints have been popping up in the last quarter of 2019 including one senator who’s introducing a bill to require the FASB to study new petitions in the future.

Controversy or not, one thing remains clear: No matter your lease number and no matter your company size or type, compliance with the new FASB ASC 842 changes isn’t optional.

And it’s not going to be easy.

In fact, there’s been an eyebrow-raising number of financial restatements filed in the past year. And most of them are related to the complexity of the FASB, GASB and IASB standards.  

This raises a major red flag for private companies.

In fact, the stats and stories point to the fact that financial restatements caused by the new accounting standards could be a nightmare.

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VSCPA Conference 2019: A Can't-Miss Event

Posted on 10/9/19 7:00 AM by Haley Martin in Events

Calling all CPAs!

In a little over a month, hundreds of professional accountants from a variety of industries will gather for the 2019 Virginia Society of CPAs (VSCPA) Technology & Innovation Showcase.

This brand new VSCPA Conference will take place at the Marriott in Richmond, Va., from November 11-12.  

The event is the brainchild of the Center for Innovation, a resource that encourages VSCPA members to think outside the box. It offers innovative education to help accountants find solutions for problems in technology and talent.

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ASC 842 Software vs. Lease Accounting Excel Templates

Posted on 10/7/19 7:00 AM by Taft Tucker in Lease Accounting

Spreadsheets are the #1 tool in an accounting department’s utility belt.

That’s why they’re so tempting to use for lease accounting compliance. That and they're cheap, flexible and everyone knows how to use them.

But they do present a few problems.

In fact, we’ve debated the pros and cons of spreadsheets when it comes to lease accounting compliance again and again. But we’ve recently had the opportunity to ask real-life experts their honest opinions about the matter:

These experts from publicly traded companies that have finished the FASB ASC 842 implementation weighed in about the role of spreadsheets in lease accounting compliance. 

What they had to say sheds valuable new light on the topic. 

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