Adoption of ASC 842 was challenging enough. No company implemented new lease accounting software expecting to replace it just a couple of years later. But many are doing just that.
Why? Because many buyers found out the hard way that under-developed systems lacked important functionality in these nine key areas. This forced accounting teams to spend countless hours creating manual workarounds in spreadsheets, leading to lost productivity, control issues and serious audit challenges.
- No Audit Details in Reports. Lease-level details needed by auditors simply weren’t included in standard disclosure, roll-forward and reconciliation reports.
- No Ad Hoc Reporting Flexibility. Users couldn’t create drag-and-drop reports on all lease data fields.
- No Accounting Policy Compliance Checks or Validation of Lease Data. Systems couldn’t test entries and bulk uploads for errors before they became big reporting problems.
- No Automatic Remeasurements. Users had to create manual calculations for renewals, terminations, partial terminations and impairments.
- No Automatic Retrospective True-Ups. Errors and omissions after month-end close required manual corrections in spreadsheets.
- No Flexibility to Split Amortization Schedules. Systems lacked the ability to break out lease details such as TIA amortization for tax, purchase accounting adjustments and cease use adjustments.
- No Discount Rate Matching. Without automatic matching to company rate tables, accountants were required to research rates and insert them manually.
- No Automatic Journal Entry Integrations with Approvals. Either systems couldn’t integrate with ERPs, necessitating manual spreadsheet uploads, or buyers discovered that delivered integrations simply didn’t work.
- No Ability to Add Company-Specific Fields. The inability to customize data fields for non-generic items created another reason to separately track information in spreadsheets.
Lease Accounting with CoStar
If your existing software is missing these essential, time-saving functions – or if you’re looking to implement the company’s first solution – get the system that can do all this and more. CoStar.
CoStar is trusted and recommended by more leading accounting firms and service providers to manage and report on real estate and equipment for compliance with ASC 842 and IFRS 16 guidance. If your lease data is already in a database, upgrading is easier than you’d expect. Search “CoStar Lease Accounting” to learn more or visit costarmanager.com.