Understanding the New FASB Lease Accounting Rules
Here's an overview of the key changes.
FASB Change #1: Every "Off Balance-Sheet" lease is moving to the balance sheet
In an attempt to achieve more transparency and comparability in financial reporting, a company will now have to capitalize all leases and report them on the company balance sheet.
What It Means
Depending on how many leases you maintain in your portfolio, this migration could be formidable. Every lease – not just real estate, but equipment, automotive, technology, etc. – is going to have to be reentered and carefully assessed and managed to ensure it gets classified correctly. If you have a slew of leases, this will be time consuming.
Your lease administration software must be able to capture and manage the data moving forward to ensure accurate compliance and optimize your business strategy.
What To Do
First, make sure your lease administration software is capable of handling these new requirements. It needs to be able to quickly migrate the essential data of each lease, catalog it, and manage it correctly. And the data needs to be easily accessible. Our program and project management software has been reconfigured and updated to ensure the transition is timely and easy to implement.