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Two Phases Of A Successful Lease Accounting Implementation Approach

By Drew Lockard and Adam Sanderson

The effective date for public calendar year filers to comply with the new lease accounting standard (“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.

The following are two phases that Dacarba LLC, an Opportune LLP company, regularly applies when guiding clients towards a successful Topic 842 implementation:

Phase 1: Initial Assessment and Scoping

All engagements are dependent on findings from Dacarba’s 2 to 4-week assessment. There are variety of solutions that we can tailor to fit a client’s needs.

Activities include:

  • Determine location, count and type of leases; determine complexity of the status of the lease portfolio as it relates to structured/unstructured data
  • Assemble cross-functional lease team and education
  • Extract relevant data points from a sample of contracts to facilitate analysis under the framework laid out in Topic 842
  • Perform, by lease type identified, required technical analysis for lease determination, classification and appropriate aggregation and disclosure
  • Recommendations and business case for proposed solution(s)

Phase 2: Solution Selection and Delivery

There are two primary services we offer: Software Selection/Implementation and Outsourcing Services.

Software Selection and Implementation
Based on the findings in Phase I, we can offer a comprehensive software selection, implementation and integration for our clients.

Activities include:

  • Identify potential software based on lease volume and complexity
  • Data capture and analysis of relevant terms and conditions from lease portfolio
  • Data migration and configuration
  • Complete testing and calculations
  • Estimate effect on financial ratios
  • Draft reporting for disclosures

Outsourcing Services
Based on the findings in Phase I, we can offer an outsourced lease management and reporting solution that accomplishes ASC 842 objectives through a turn-key service.

Activities include:

  • Data capture and analysis of relevant terms and conditions from lease portfolio
  • Data migration, configuration and onboarding
  • Complete testing and calculations
  • Estimate effect on financial ratios
  • Draft reporting for disclosures
  • Ongoing portfolio management support

We Can Help

Dacarba 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.

To learn more how we can help with your lease accounting preparation and compliance needs, email us at and we will initiate the introduction to our team to assess your requirements. 






Drew LockardManaging Director

Drew Lockard serves as a Managing Director at Dacarba, bringing with him extensive experience in management consulting services across a variety of industries. Drew has made significant contributions to clients in the areas of business performance analytics, turnaround management, and corporate performance improvement. He is extensively trained in advanced data analysis and strategy execution.

Adam SandersonDirector

Adam Sanderson has extensive management and consulting experience across a variety of industries in the areas of financial analysis, strategic advisory, program management, information technology and data analytics. Recently, Adam has led lease accounting system implementation projects for Fortune 500 companies, including Tyson Foods, General Dynamics, Owens Corning and Owens and Minor.