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AMTdirect Insights Blog

AMTdirect Insights Blog

ASC 842 Compliance: 4 Indicators You Must Comply with FASB ASC 842

Posted on 11/25/19 7:00 AM by Taft Tucker in FASB

A strange phenomenon is taking over the accounting world.

Even though there’s been a massive deadline delay for FASB ASC 842 compliance, most private companies are shrugging their shoulders.

In fact, 45% of private companies haven’t even started basic preparations for ASC 842 compliance. And 52% say the deadline change has halted their plans to move forward with implementation.

This passive attitude stems from the simple fact that some private companies don’t believe the new lease accounting standards apply to them.

If you fall into this line of thinking, we’ve got news for you.

There are actually few companies to which the new lease accounting standards don’t apply. 

Because there are so many dangerous misconceptions floating around about what’s required with the new lease accounting standards and who’s required to follow them, we’re shedding light on this critical topic.

These 4 indicators should clear up the confusion for CFOs and controllers and safeguard against their private companies getting left behind.

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The New Lease Standards: 6 Ways They Can Destroy Your Company

Posted on 11/18/19 7:00 AM by Taft Tucker in FASB

Public companies faced 5 major challenges while implementing the new lease standards, according to a new report from PwC

These roadblocks shed light on what private companies can expect to deal with in 2020:

  1. Automating new lease reporting processes
  2. Ongoing data capture for new leases or changes to existing leases
  3. Identifying and accounting for embedded leases
  4. Strengthening controls for new leasing processes
  5. Disclosure reporting

The new accounting standards are a formidable undertaking for private companies. 

To add to the pressure, the stakes are high to get compliance 100% accurate. Negative side effects are plaguing public companies, including even minor mistakes in reporting. Private companies can expect to be hit just as hard.

One thing is for sure… get compliance wrong, and you’re in for a steady diet of uncertainty and sleepless nights.

Because the new accounting standards have the potential to destroy your company’s financials, we put together a list of possible impacts. It will help you understand the magnitude of lease liabilities and give you a reality check about FASB ASC 842.

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Financial Lease Accounting: The Inevitable Shortage of Software Vendors

Posted on 11/11/19 7:00 AM by Taft Tucker in FASB, in Lease Accounting

It’s pretty basic economics…

When there’s high demand for a product or service in the market, the price goes up. And the amount of providers able to offer that high-demand product or service goes down.

This is especially true when the product or service isn’t offered by many vendors in the first place. And it’s exactly what’s happening with lease accounting vendors right now.

The truth is, there’s a shortage of companies that offer financial lease accounting software.

When you consider the fact that most public companies are ramping up for year two of reporting, and private companies have only a little over a year to meet their compliance deadline, it should come as no shock that there aren’t enough solutions in the market today to support the growing needs of U.S. companies.

Even in the best of circumstances, there would be a squeeze.

And with complexities galore and stringent audits, implementing the FASB ASC 842 deadline by January 1, 2021 certainly does not present the brightest of futures.

Because this shortage is so significant and not many experts in the industry are talking about it, we’re covering it in depth. Use this information to light a fire under your own compliance efforts.

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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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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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