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Accounting

Private Firms Struggle to Meet ASC 842 Lease Accounting Standard Dec. 15 Deadline

With barely two months remaining before the Dec. 15 deadline when ASC 842 becomes enforced, as many as one-third of private company executives feel unprepared to comply with the lease accounting deadline and most firms (78%) are primarily collecting ...

Oct. 20, 2021

With barely two months remaining before the Dec. 15 deadline when ASC 842 becomes enforced, as many as one-third of private company executives feel unprepared to comply with the lease accounting deadline and most firms (78%) are primarily collecting data from lease contracts manually. To help private firms meet this looming deadline, IRIS Innervision, an international leader in the provision of lease accounting software and portfolio management services, pledges to help the firms affected with a cloud-based standalone lease accounting software solution. A division of IRIS Software Group (IRIS), IRIS Innervision helps firms manage the entire leasing process from inception through to compliance, including the accounting and financial reporting requirements of the new ASC 842 standards.

“This new standard will impact private entities in the U.S. from the start of their next business year after Dec. 15, 2021, so they still have time – but it’s running out fast! The transition to complying with ASC 842 will impact almost every department, subsidiary and office of a business. Businesses must begin the transition sooner rather than later to ensure they have complete visibility of all active leases and can consistently demonstrate they remain compliant,” says Maeve O’Connell, product director, IRIS Innervision. “This transition can require a significant amount of work, but the simplest, fastest and most cost-effective way to ensure optimal compliance with ASC 842 and future accounting standards is for businesses to implement lease accounting software.”

IRIS Innervision is a user-friendly, fast-to-implement software application that centralizes, analyzes and reports on all active lease agreements to give businesses real-time updates to leases and a complete view of the company’s entire lease portfolio.  It replaces ineffective spreadsheets making it easier for businesses to meet the new ASC 842 standard and puts users in control across the entire lease lifecycle to ensure a smooth, easy transition to any future standards. With extensive lease accounting software experience, IRIS Innervision is used by hundreds of mid-tier and enterprise-level companies including Capgemini, Domino’s Pizza and GE Aviation across more than 100 countries. Its system hosts in excess of 120,000 leases, with a combined value of over $100 billion, and offers multiple features including:

  • Covid-19 rent concessions – built-in functionality that meets the FASB Covid-19 rent concessions and ASC lease accounting standards.
  • Leasing subledger – records all leasing transactions, generating the lease accounting outputs for upload into an ERP or multiple ERP systems with ease for complete transparency.
  • Amortization and depreciation schedules – creates a right of use (ROU) asset and amortization schedule at lease inception, displaying how the lease asset is depreciated and liability amortized over time. With each in-life change or modification, a new ROU asset schedule and liability amortization is created.
  • Simplified Re-measurement — calculates adjustments to the right-of-use asset and lease liability as changes occur and produces general ledger postings that reflect the amendment accordingly.
  • Accurate disclosures and audit trail reporting — a full suite of out-of-the-box accounting and standard reports for disclosures and forecasting for ASC 842 including disclosure reports, portfolio run-off reports for forecasting, and detailed audit reports.
  • Lessee and Lessor accounting — addresses both lessee and lessor accounting requirements for FASB standards, across all asset categories.
  • End of lease notifications — actively manages expiring leases by providing notifications when key dates are approaching, lease is due to expire, or action is required to avoid overpayments and unwanted extensions.

O’Connell continues, “When it comes to compliance, CFOs are risk averse and demand a proven, trusted solution that can address local as well as global financial requirements in a fast-changing regulatory environment.  Given the new ‘work realities’ of remote working, firms want a tested and easy to use technology solution that is simple to implement and requires little infrastructure and technical requirements.  IRIS, which has more than 20 years’ experience in helping clients to effectively manage the entire leasing process, is trusted by thousands of users from the world’s leading companies.”