The implementation of ASC 842 has brought significant changes to lease management and subsequent measurement practices. As organizations strive to comply with the guidelines, lease management software has emerged as an indispensable tool.
In this blog post, we will explore the subsequent measurement of leases under ASC 842 and discuss how LeasO can make this complex task easier and more efficient.
Under ASC 842, subsequent measurement refers to the ongoing evaluation and recording of lease-related information after the initial lease recognition. It involves assessing various factors such as lease term, lease payments, impairment, and changes in circumstances that may impact lease values. While subsequent measurement is crucial for accurate financial reporting, it can be a time-consuming and intricate process.
A lease management software like LeasO plays a vital role in streamlining subsequent measurement under ASC 842. Here are several ways in which it can make the job easier:
Centralized Lease Data: LeasO provides a centralized repository for storing and organizing lease data. This eliminates the need for manual tracking and spreadsheets, reducing the risk of errors and ensuring data consistency.
Automated Calculations: Manual calculations for complex lease terms and adjustments can be error-prone and time-consuming. LeasO easily automates calculations, such as lease payments, interest expense, and right-of-use asset values, ensuring accuracy and saving valuable time for finance professionals.
Notifications and Reminders: Subsequent measurement requires timely assessments of lease modifications, reassessments of lease term and options, and impairment testing. Lease management software can send automated notifications and reminders for critical dates and events, ensuring that lease accountants never miss important deadlines.
Lease Modification Management: ASC 842 guidelines require the proper handling of lease modifications, such as changes in lease terms, conditions, or payment schedules. Lease management software allows for efficient management of these modifications, ensuring accurate subsequent measurement and seamless financial reporting.
Real-Time Reporting: LeasO enables real-time reporting on lease liabilities, right-of-use assets, and related financial metrics. This feature provides organizations with up-to-date information for decision-making and financial analysis, reducing the risk of errors caused by outdated data.
Audit Trail and Compliance: Compliance with ASC 842 involves maintaining a comprehensive audit trail of lease data and subsequent measurement activities. Lease management software captures and stores detailed transaction histories, allowing for easy retrieval and supporting the audit process.
The subsequent measurement of leases under ASC 842 guidelines can be a complex and time-consuming task for lease accountants. However, with the advent of lease management software like Leaso, organizations can simplify the process and ensure compliance.
By providing centralized lease data, automated calculations, notifications, and reminders, efficient lease modification management, real-time reporting, and audit trail capabilities, LeasO streamlines subsequent measurement tasks.
Implementing such software not only saves time and reduces errors but also enhances financial reporting accuracy, enabling organizations to meet the requirements of ASC 842 with ease.