The new lease accounting rules went into effect for fiscal years beginning after December 15, 2021, and unfortunately, it appears as if many organizations are not ready. Also worth mentioning, is that these new leasing rules have turned out to be far more difficult to follow than many firms and companies anticipated.
The revised standard (ASC 842 and GASB 87 in the U.S.; IFRS 16 internationally) adds operating leases onto the balance sheet so all lease obligations are included on the financial statements. This change was intended by standard setters to better reflect an organization’s lease obligations for all leases on their financial situation.
“The new lease standard has introduced a tremendous amount of work for our clients and our firm,” said Hughes, Snell & Co,. PA Shareholder, Catherine Palmisano, CPA. “We have a way to make the implementation process as seamless as possible with LeaseCrunch. The software is customizable to the size of the company, though designed to handle large and complex portfolios, and enables our firm to either act as bookkeeper or set clients up within the system to manage their own lease portfolio. Other built-in efficiencies include a wizard to guide users on variables required by auditors, templates for FASB, GASB and International Financial Reporting Standards, and automated footnote disclosures.”
LeaseCrunch, the only lease accounting software made by former CPA firm auditors for CPA firm auditors, was named one of the best accounting software providers in 2021, as determined by Digital.com.
Designed by CPAs, former Big 4 public accounting auditors, software development veterans and a former member of the FASB staff, the application offers an easy-to-use customer interface that delivers “audit in a box” lease accounting services, reducing the time it takes clients to prepare for an audit. LeaseCrunch allows companies to identify policy elections for the leasing standard through templates for both US GAAP and IFRS.
“CPA Firms are playing a critical role in helping companies meet the new lease accounting rules, particularly due to the level of complexity and changes,” said LeaseCrunch CEO Ane Ohm.
“For instance, what previously might have been considered operating or capital leases will now all be capitalized on the balance sheet, which is similar to a capital lease. For what was previously classified as an operating lease, this will have an effect on the Statement of Financial Position and balance sheet.”
For more information about how the new lease standard may impact your business, or to schedule a free, no-cost consultation with a member of our team, call our office today to get started.