The introduction of new lease accounting standards in recent years—ASC 842, IFRS 16 and GASB 87—has strained the resources of companies across sectors. These standards not only increased the complexity of lease accounting but also introduced significant demands on the time and resources of accounting and finance professionals.
Increased complexity
The adoption of these new lease standards has created additional complexities that companies were not required to address previously. Organizations now face greater scrutiny around balance sheet impacts due to impairments, modifications, and extensive disclosures. This shift has made lease accounting a more prominent aspect of financial reporting, requiring ongoing attention from teams that may lack the time and/or expertise to navigate this highly technical accounting area.
Ongoing post-implementation demands
Even if your company has made it through year-end audit seasons post-implementation, you’ve likely noticed additional demands from auditors and encountered new issues that never arose under previous lease guidance. Performing the many analyses needed for compliance with ASC 842, for instance, is both time-consuming and complicated. These situations may require the need for specialized lease accounting support to mitigate risks and ensure compliance.
Read more about how we assisted a $4B industrial products manufacturer with ASC 842 Implementation and the transition to a central lease function
Consider external support
SolomonEdwards understands that lease accounting can be a significant burden on accounting and finance teams. Our managed lease service is designed to make lease accounting an afterthought, allowing your team to maintain focus on more essential and impactful business activities. We take on the monthly, quarterly and annual reporting responsibilities; manage changes to your lease portfolio; and provide the tools and data necessary for accurate forecasting.
Expertise in niche areas
Our experienced team is well-versed in lease accounting, reporting and disclosure and is ready to assist with niche technical matters that often arise under the new standards. We can tailor our support to your specific needs, whether you choose to work with your existing lease accounting software or migrate your leases to the platform utilized by our team.
Learn more about our Transaction & Regulatory Advisory Services and reach out if you’d like to discuss how we can provide a solution that works for your lease portfolio. Together, we can navigate the evolving landscape of lease accounting with confidence and efficiency.
About the Author
Mike Vanscoy is a Principal in SolomonEdwards’ Transaction & Regulatory Advisory Services practice with over 25 years of national and international experience in various aspects of technical accounting and financial reporting, financial and accounting management, audit compliance, financial management standards and internal policies/controls and procedures.
To learn more, connect with Mike on LinkedIn, at mvanscoy@solomonedwards.com or call 610.902.0440.
