ASC 842: Preparing for the New Lease Accounting Standard
Compliance with the impending FASB ASC 842 guidelines for lease accounting treatment is on the minds of the Controllers and CFOs of my clients. Each client has formed an implementation team to assess the impacts to their financial statements, especially their Balance Sheet, and lease management processes. Most companies are concerned about the ongoing governance of the lease agreement management processes since currently, these processes are commonly decentralized. They are also concerned about separating the non-lease components of a lease agreement so that they are not needlessly grossing up their liabilities.
Opportune provides several valuable services to help clients implement the ASC 842 guidelines. We help clients:
- Complete an impact assessment and develop accounting treatment memos for their auditors.
- Analyze contracts and identify the fixed, variable, and service components.
- Identify and collect current lease agreements from various parts of an organization including facilities, operations, transportation, marketing, land, IT, etc.
- Define and implement the future state business processes, governance, and change management activities.
- Conduct software selections and implement solutions. We can help clients formulate 2018 implementation budgets before the budgets are approved by their Board.
- Provide an outsourced option of a cloud-based, turn-key solution where Opportune will track a client’s contracts, prepare the disclosures, and Balance Sheet entries. This is a great option for clients that do not have a large number of lease agreements and do not want to incur the significant software, implementation, and ongoing tracking costs.
Please reach out if you have technical accounting or implementation questions about the ASC 842 guidelines. We are happy to talk with you about your specific situation and concerns.