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AMTdirect Blog

AMTdirect Blog

Accounting Automation for Leases: The Bright Side of the New Lease Standards

Posted on 1/13/20 7:00 AM by Haley Martin in FASB, in Lease Accounting, in Compliance

Compliance under FASB ASC 842 is not all gloom and doom.

Although, if you’re in the throes of implementing the new lease accounting standards, it can feel like a perpetual dark cloud hanging over you with no hope of ever seeing sunny skies again.

While it’s true that preparing for compliance--the monumental tasks of gathering leases, analyzing them, creating policies, evaluating lease accounting software providers, training staff, abstracting and migrating data and then testing—is challenging, the new lease accounting changes present a golden opportunity for strategically optimizing your finance and lease accounting practices.

And that’s best accomplished through the tool of automation.

Why now?

Despite the deferred deadline, compliance is not a choice. Any business with even one lease over 12 months in duration must report under the new requirements. So, if you’ve ever considered an automated solution for either lease management or lease accounting, there’s no better time to dive in.

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ASC Compliance: The Countdown to Meet the New Deadline

Posted on 1/6/20 7:00 AM by Taft Tucker in FASB, in Lease Accounting, in Compliance

You may have just breathed a huge sigh of relief. 

The ball dropped at midnight ringing in 2020, giving private companies one more year to achieve FASB ASC 842 compliance.  

To many, that sounds like adequate time to accomplish all the necessary steps to implement the new lease accounting standards, but several factors will crunch that one year into a time span barely sufficient to successfully meet the new deadline.

Fewer available vendors. With 52% of private companies admitting that the delay has pushed their timeline back, you’ll be one of thousands of businesses vying for services from a limited number of lease accounting specialists, software providers and auditors. Most of these experts have already been secured by the other 48%.

More complex than you think. Based on what public companies experienced during the implementation process, the adoption of FASB ASC 842 will be more complicated and time-consuming than you expect.

Added responsibilities. Even if you’ve budgeted for additional employees or a consultant, your staff will have to complete a myriad of additional tasks associated with implementation while maintaining their normal workload.

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ASC 842 Implementation Plan: Execute the New Lease Standards Flawlessly

Posted on 12/23/19 9:00 AM by Taft Tucker in FASB

An ounce of prevention is worth a pound of cure.

That warning has stood the test of time for one reason: Because it’s true.

And public companies that have implemented FASB ASC 842 are wishing they had taken it to heart.

Prevention means taking as much time as possible to prepare for the worst case scenario. And although public companies that weren’t of this mindset suffered the consequences, private companies needing to implement the new lease accounting standards don’t have to. 

In fact, private companies have been handed the incredible opportunity of more time to prepare, more time to take preventative measures, and more awareness about the repercussions they may face.

There are 5 main ways private companies can prepare now and trade a panicked rush to the finish line for a world-class FASB ASC 842 implementation plan.

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What to Expect When the FASB ASC 842 Deadline Hits the Floor

Posted on 12/16/19 7:00 AM by Taft Tucker in FASB

FASB ASC 842 may not seem like a big deal. 

After all, compliance has been pushed back and budget planning for the new year is pressing in. It would seem there’s no need to start implementing the new lease accounting standards just yet.

Unfortunately, this perspective is what put so many public companies in the dog house with their implementation timeline.

And while the deadline change brings good tidings to private companies on the surface, when FASB ASC 842 hits the floor in January of 2021, it could have devastating effects on companies that drag their feet on implementation.

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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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