Lease accounting consulting
Lease accounting is experiencing revolutionary changes across all industries
The new ASC 842 standard brings a wide range of implications across most organizations, and will require most operating leases to be reflected on the balance sheet, which by itself is a sizeable task.
The data and systems challenges ASC 842 will bring to companies are significant and, without adequate planning and preparation, may be overwhelming. Given the time commitment required to implement the standard and the level of complexity involved, companies should start gathering data, abstracting leases, and selecting and implementing technology solutions soon to avoid challenges down the road.
The new standard is a fundamental change from historical accounting standards. It is complex and requires careful consideration. Key items to address include:
- Modified retrospective transition requirements and disclosures
- Information technology (IT) systems and new application requirements
- Increased level of judgments, estimates and required documentation
- Evaluation and separation of embedded leases
- Effects of financial statements on key operating metrics and debt covenants
- Tax considerations related to both financial statements and property, sales and use taxes
- Interaction with other guidance, including the new revenue standard
Implementing the new lease standard involves significant judgments and requires detailed evaluation, documentation and disclosures.
A comprehensive approach
Our focused, integrated impact assessment includes:
- Identification of critical details
- A deep dive into a sample of leases and possible embedded leases
- Establishment of a cross-functional implementation team
- Preparation of a customized implementation plan
- Evaluation and recommendations of technology
An integrated team
RSM has assembled an integrated team comprised of members specializing in technical accounting and technology solutions to assist companies in implementing ASC 842. This multidisciplinary team addresses technology issues, internal controls, income tax effects and technical accounting questions. We also can help companies identify the best technology solution and ensure it is implemented to meet current and future business needs.
How can we help you?
Contact us by phone 800.274.3978 or
submit your questions, comments, or proposal requests.