All organizations, whether private, public or non-profit, are required to account and record all real estate, equipment and embedded leases in their financial statements. Historically this has been disclosed in financial statement footnotes, but under the new standard, they will be accounted for under the “Right to Use” asset and liability on the Balance Sheet.1
The complex and unique accounting required to comply under these new standards requires expertise in accounting, real estate, complex workflows and technology. Since 2016, the AccountLease™ team has been developing a comprehensive solution to address these needs and provide our clients with a 360-degree view of their leases.
Our team has the unmatched expertise to guide you through the process of adopting the new lease standards and help your organization stay clear of possible hidden dangers or difficulties along with way.
We transform your reporting, auditing, and lease management processes by centralizing and tracking all lease documents in one searchable database. This streamlining effort helps prevent unnecessary expenses and increase efficiency.
Our team has over 100 years of combined experience in accounting for leases and thousands of real estate transactions under our belt, representing over $2B in value. For a snapshot of AccountLease™ By The Numbers, click here.
Every industry is required to comply under the new standards. Our current client list includes companies in: healthcare, biotech, telecommunications, transportation, manufacturing and non-profits.
The typical AccountLease™ client has twenty or more real estate, equipment or embedded leases in their portfolio. Equipment leases may range from copiers to forklifts and vary by industry, but often may exceed the number of real estate leases. Embedded leases are often buried within supply chain service contracts, and may represent lease arrangements not previously accounted for as leases.
“An estimated $3.3 trillion in leases, currently buried in the footnotes of financial statements, are expected to find their way onto corporate balance sheets next year because of the change that goes into effect at the end of the year.
That will disturb corporate debt-to-equity ratios, a metric lenders use to set loan covenants that protect against defaults. The new accounting method could trigger those covenants—even if nothing else about a company’s financials has changed—and erode the borrowing power of some companies”.
– The Wall Street Journal
https://www.wsj.com/articles/cfos-fret-about-loans-on-the-eve-of-new-accounting-rule-1539250200
1FASB ASU 2016-02 (or Topic 842) for US GAAP and IFRS 16 (International Financial Reporting Standards)
Together, Swenson, Cresa, KSDT, LeaseCrunch, Md7, and CFO For Hire put their combined expertise to work for you and provide guidance on lease accounting implementation. The AccountLease™ team is comprised of professionals who contribute to the technical expertise and implementation strategy. We have conducted dozens of seminars over the last year and have presented at various conferences.
Here are some practical considerations for implementing the new lease accounting standard:
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