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AMTdirect Insights Blog

AMTdirect Insights Blog

Death by Financial Restatement: Don't Let FASB ASC 842 Doom You to Fail

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

The debate over the new 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 lease accounting standards 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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Lease Accounting Tools: The Compliance Readiness Kit

Posted on 8/26/19 9:00 AM by Taft Tucker in FASB

Lease accounting compliance is a tall order.

Whether you’re a public company getting ready for round two of reporting or a private company gearing up for implementation, the FASB ASC 842 standard can’t be ignored.

And for good reason.

Turns out, there’s been a major miscalculation about deployment time for lease accounting compliance.

In fact, very few companies are ready.

When PwC conducted its 2018 accounting survey, 34% of companies were still early in the assessment phase with 6 months to go. 83% were less than halfway complete with the project. And one-third were unsure or doubtful they'd meet the effective deadline.

It’s time to get real about implementation, processes and controls to execute the new accounting standard accurately and on time.

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ASC 842 Adoption: Post Implementation Challenges

Posted on 8/12/19 9:00 AM by Taft Tucker in FASB, in Lease Accounting

It’s a slow clap for companies who’ve implemented the new lease accounting standards.

That’s because most organizations made a mad dash for the finish line. In an October 2018 survey by PwC, more than 15 percent of public companies hadn’t even started implementation of FASB ASC 842 that took effect a few months later.

Private companies aren’t far behind.

News of a deadline extension - most likely due to procrastination and an overwhelming to-do list - is hot off the press.

Even for those who did meet the compliance deadline, most would admit it was little better than a hack job with an all-hands-on-deck approach and little-to-no expertise directing the veritable financial circus.

With 6 months to go before public companies submit reporting under the new FASB ASC 842 compliance standards once more, it’s time to start the cleanup process.

Companies must push themselves to rework the way their team functions to create processes, procedures, and controls for long-term success under post-FASB ASC 842 implementation.

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ASC 842 Compliance Deadline Change and What it Means for You

Posted on 8/5/19 9:55 AM by Taft Tucker in FASB

A palpable sigh of relief went through the accounting world last week.

As of July 17th, the Financial Accounting Standards Board (FASB) voted to extend the deadline for its ASC 842 compliance.

Private companies get another year on the clock for ASC 842 compliance.

This move by the governing board to transition the deadline to January 1, 2021 presents some serious questions. After all, public companies didn’t receive this generous offer. Their compliance deadline remained set in stone for the beginning of 2019.

So why did the FASB decide to initiate this roll back? It’s a tricky question fraught with complications and complexity, much like the new lease accounting standard itself.

On the surface, it makes sense why private companies are welcoming this update to the schedule. There’s a pile of challenges even the most fearless accountant wouldn’t want to tackle. 

But dig deeper into the effects of the decision, and you might question if it was a good idea after all.

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Equipment Leasing and the New Accounting Standards: What Qualifies?

Posted on 7/29/19 9:00 AM by Taft Tucker in Lease Administration, in FASB, in Lease Accounting, in GASB

More than 80% of American companies lease equipment rather than purchasing it.

That’s a big number.

And the reason you should care about it is even more significant. When your compliance deadline rolls around, all of your equipment leases will have to be noted on your balance sheet.

In the past, this treatment was reserved for capital leases only.

But now the Financial Accounting Standards Board (FASB) and its sister governing boards have also decided operating leases - including equipment leases - should move out of the footnotes to join the party on the balance sheet.

But just what is an equipment lease according to the accounting governing boards?

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How Postponing FASB 842 Implementation Might Hurt Your Profits

Posted on 2/7/19 2:22 PM by The Team at AMTdirect in FASB, in Lease Accounting

Waiting to start FASB 842 implementation is like waiting to do your taxes.

Hunky-dory in the beginning...

...but potentially costly, time-consuming and painful in the end.

Just ask any public company that had to do it last year: The longer you wait, the more expensive - in dollars and days - implementation will be.

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