If you’re looking for the best lease accounting software ASC 842, you’re in the right place. With the new lease accounting standard, ASC 842, coming into effect in 2021, it’s crucial to have a reliable software solution that can help you keep track of your leases and comply with the new rules. In this guide, we’ll take a closer look at the best lease accounting software ASC 842 and what you need to know about it.
What is ASC 842?
ASC 842 is a new lease accounting standard issued by the Financial Accounting Standards Board (FASB) that replaces the previous ASC 840 standard. It requires companies to recognize most leases on their balance sheets, which will have a significant impact on their financial statements. The new standard aims to improve transparency and comparability of financial reporting related to leasing transactions.
What is Lease Accounting Software ASC 842?
Lease accounting software ASC 842 is a solution that helps companies comply with the new lease accounting standard by automating lease accounting processes. It enables companies to track and manage their leased assets, calculate lease liabilities and right-of-use assets, generate accounting reports, and ensure compliance with the new standard.
Why Do You Need Lease Accounting Software ASC 842?
Lease accounting software ASC 842 is essential for companies that lease assets and need to comply with the new lease accounting standard. Without the right software solution, complying with the new standard can be a daunting and time-consuming task. Lease accounting software ASC 842 can help companies automate their lease accounting processes, reduce errors, and ensure compliance with the new standard.
What Are the Key Features of Lease Accounting Software ASC 842?
Lease Management
Lease accounting software ASC 842 should have a lease management module that enables companies to track and manage their leased assets, including lease agreements, terms, and conditions.
Lease Accounting
The software should be able to calculate lease liabilities and right-of-use assets accurately and generate accounting reports, including balance sheets and income statements.
Compliance
Lease accounting software ASC 842 should ensure compliance with the new lease accounting standard by automating lease accounting processes and generating reports that meet the new standard’s requirements.
Integration
The software should be able to integrate with other accounting and ERP systems to ensure data consistency and accuracy across all systems.
User-Friendly Interface
The software should have a user-friendly interface that makes it easy for users to navigate and use the system.
Flexibility
The software should be able to adapt to the unique needs of different companies and industries, including multi-currency and multi-language support.
What Are the Benefits of Lease Accounting Software ASC 842?
Lease accounting software ASC 842 offers several benefits to companies, including:
Accuracy
The software can help companies ensure the accuracy of their lease accounting processes, reducing the risk of errors and misstatements in financial statements.
Efficiency
Lease accounting software ASC 842 can help companies automate their lease accounting processes, reducing the time and effort required to comply with the new standard.
Transparency
The software can help companies improve transparency and comparability of financial reporting related to leasing transactions, enhancing stakeholder trust and confidence.
Cost Savings
The software can help companies save costs by reducing the need for manual processes and minimizing the risk of non-compliance penalties.
Frequently Asked Questions
What is the difference between ASC 840 and ASC 842?
ASC 840 is the previous lease accounting standard that did not require companies to recognize most leases on their balance sheets. ASC 842 replaces ASC 840 and requires companies to recognize most leases on their balance sheets.
When does ASC 842 come into effect?
ASC 842 comes into effect for public companies for fiscal years beginning after December 15, 2018, and for private companies for fiscal years beginning after December 15, 2021.
What happens if a company does not comply with ASC 842?
Non-compliance with ASC 842 can result in penalties, including financial and reputational damage.
Can lease accounting software ASC 842 be customized to meet my company’s needs?
Yes, lease accounting software ASC 842 can be customized to meet the unique needs of different companies and industries.
Can lease accounting software ASC 842 integrate with other accounting and ERP systems?
Yes, lease accounting software ASC 842 can integrate with other accounting and ERP systems to ensure data consistency and accuracy across all systems.
How much does lease accounting software ASC 842 cost?
The cost of lease accounting software ASC 842 varies depending on the size and complexity of your company and the features and functionalities you need.
Is lease accounting software ASC 842 difficult to use?
Lease accounting software ASC 842 should have a user-friendly interface that makes it easy for users to navigate and use the system.
Can lease accounting software ASC 842 be used for all types of leases?
Yes, lease accounting software ASC 842 can be used for all types of leases, including real estate, equipment, and vehicles.
Pros of Lease Accounting Software ASC 842
Lease accounting software ASC 842 offers several benefits, including:
- Easy compliance with the new lease accounting standard
- Automation of lease accounting processes
- Accurate lease accounting calculations
- Flexible and customizable features
- Integration with other accounting and ERP systems
Tips for Choosing the Best Lease Accounting Software ASC 842
- Identify your company’s unique needs and requirements
- Research different lease accounting software ASC 842 options and compare features and functionalities
- Consider the software vendor’s reputation and customer support
- Choose a software solution that is user-friendly and easy to use
- Ensure the software solution can integrate with other accounting and ERP systems
Summary
Lease accounting software ASC 842 is essential for companies that lease assets and need to comply with the new lease accounting standard. It offers several benefits, including accuracy, efficiency, transparency, and cost savings. When choosing the best lease accounting software ASC 842, it’s essential to consider your company’s unique needs and requirements, research different options, and choose a software solution that is user-friendly, flexible, and can integrate with other accounting and ERP systems.