Top 5 Effective Lease Accounting Software Selection & Implementation Solutions
The effective date for public calendar year filers to comply with the new lease accounting standard (ASC Topic 842) is fast approaching. The new standard will have a significant impact on how entities manage, account for and report impacts of lease obligations and leased assets on financial statements for reporting purposes.
Topic 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.
5 Key Lease Accounting Software Selection & Implementation Solutions
The following are five effective software and selection implementation steps that Dacarba LLC professionals are capable of executing for business entities during the solution selection and delivery phase, which can typically take between three to five months:
1) Week 1 (Initiation - Kickoff Meeting)
2) Week 2-4 (Requirements Identification)
- Define project charter (including client activities, key dates, milestones)
- Functional and technical requirements workshops
- Inventory of lease agreements - capital and operating
- Current COA, F/S and disclosure review
- Current capital and operating lease acceptance, management process and controls
- Requirements validation and signoff
3) Week 5-8 (Configuration)
- Lease agreement upload along with specific attributes
- Solution configuration
- Future state process documented, including defined roles and responsibilities, accessibility and controls
4) Week 9-12 (Testing)
- IFRS completeness and accuracy testing
- End-to-end testing, including integration and reporting
- User acceptance testing
- Training and procedure materials development
- Rollout plan and deployments strategy
5) Week 13-14 (Acceptance & Go-Live)
- Cut-over activities and migration to production
- End-user training
- Rollout to users
How Dacarba Can Help
Dacarba LLC, an Opportune LLP company, can offer technical accounting guidance and lead technology implementation projects by leveraging our ASC 842 experience and lessons learned such as the importance of a clearly documented approach to adoption, proving completeness of the lease population and locating unidentified leases. Dacarba also facilitates roundtables with industry peers to discuss common issues and call upon our experience to act as a client-advocate in situations where audit firms are reaching inconsistent answers with industry peers.
Dacarba's Complex Financial Reporting Practice includes members who have served lead roles on Fortune 250 ASC 842 cross-functional teams. Dacarba’s Process and Technology staff have coordinated, led and assisted large-scale lease accounting software implementation projects, as well as built customizable small-scale solutions for clients with fewer leases. In addition, we can address both the technical reporting requirements and the technology aspects of any lease solution selected. Dacarba's experienced team of professionals can provide synergies and cost savings as it relates to the new lease accounting standard.
To learn more how we can help with your lease accounting preparation and compliance needs, email us at Leasing842@dacarba.com and we will initiate the introduction to our team to assess your requirements.