Dacarba Kicks Off First Lease Accounting Informational Series
Dacarba LLC, an Opportune LLP company, recently hosted the first of four informational meetings with business leaders representing various industries in Houston to discuss how best to manage, account for and report leases, including for equipment and real estate, under the new Lease Accounting Standard (“ASC 842”).
ASC 842 requires public companies to include all leases with terms greater than one year on their balance sheet for annual and interim reporting periods beginning after December 15, 2018 (Effective Date). The private company Effective Date provides a one-year deferral, December 15, 2019, for annual reporting periods and interim periods the following year. Early adoption is also permitted for all entities.
Among key points discussed:
- Auditors will require more rigor around accounting for and reporting leases on balance sheets under ASC 842
- Determining procurement of lease accounting process such as software selection, implementation and other options
- Companies can elect to use hindsight in determining a lease term and in assessing impairment of right-of-use (ROU) assets
- Transportation agreements, land rights and the bifurcation of lease vs. service components continue to be a hotly debated topic
Dacarba can implement any of a number of large lease software solutions, including:
- Nakisa – SAP’s global preferred solution. Customers include ConocoPhillips, Walmart, Pfizer, P&G and Air France
- PowerPlan – Have had a solution since 2000 for the current lease accounting guidelines. Updating to support ASC 842. Customers tend to be utilities
- IBM TRIRIGA – Real estate-based originally built for facilities management. Big 4 accounting firms working within many accounts
- Lease Accelerator – Built originally to manage the lease procurement and bidding process. Evolved to support the accounting requirements
Vendors of these large-scale solutions tend to have annual subscription fees of greater than $200,000. Due to the high cost of such solutions, Dacarba can also offer assistance implementing smaller, more affordable solutions for its clients.
Additionally, Dacarba offers an outsourced lease management and reporting solution that enables a company to comply with ASC 842 while, in parallel to improve efficiency and minimize costs, allows clients to focus on their core businesses.
All Dacarba-hosted Lease Accounting informational meetings include one hour of CPE (Continuing Professional Education) credit. The next meeting is scheduled for April 24, 2018 in Austin, Texas. Please contact firstname.lastname@example.org to attend.
HOW TO GET STARTED
Contact one of our Complex Financial Reporting team members below and we will initiate the introduction to our team to assess your requirements.