How to find the best lease accounting solution for your business?
With the introduction of new lease accounting standards - IFRS 16, ASC 842, and AASB 16 - significant changes were made to how leases are reported on the balance sheet. These standards require lessees to recognize most leases as assets and liabilities. Companies with large portfolios of operating leases have been especially impacted. Ensuring compliance is not easy. It takes time, planning, and execution, but with the right lease accounting software in place, the process becomes much more manageable.
Choosing the right solution for your business can be challenging. That’s why we aim to help you make an informed decision. In this guide, you’ll find key information about how lease accounting software can support your business.
Making day-to-day lease accounting easier
Lease accounting software simplifies the transition to IFRS 16, ASC 842, and AASB 16 by helping manage routine and technical tasks more efficiently. It reduces manual work, minimizes risk, and saves time and costs. Whether your company manages 50 or 3,000 lease agreements, the software provides a structured and efficient way to stay compliant.
All lease data is stored in one centralized system, regardless of the number of agreements, statuses, or lessors. What used to be a major challenge for finance and administrative teams is now streamlined. Agreements are typically categorized into three main statuses:
New agreements under consideration
Active leases
Archived leases (expired or terminated)
Authorized users can easily access the relevant information, reducing confusion and improving team collaboration.
If changes are needed on an active lease, the system allows you to update data in just a few clicks. An audit trail keeps a record of all changes, ensuring transparency. Additionally, a dedicated database can store lessor information, including contact details and lease portfolios, making it easy to find what you need when you need it.
Smart tools for lease accounting
Having all your data in one place is a good start. Automated tools that do the heavy lifting are even better. Lease accounting software calculates lease liabilities and right-of-use (RoU) assets based on the parameters you provide, so you don’t have to do it manually.
Under the new standards, lessees must recognize nearly all lease agreements on the balance sheet. The system calculates the lease liability as the present value of lease payments, including amounts due at the end of the term and options to purchase or terminate. It also calculates the initial RoU asset value, which includes the lease liability, any lease payments made before the start date, initial direct costs, and estimated costs for dismantling or restoring the asset.
If anything changes — such as a remeasurement or lease modification — the system automatically updates the lease liability and RoU asset values and generates the appropriate General Ledger entries. This helps prevent discrepancies and keeps your accounting accurate.
For leases with variable payments tied to an index or interest rate, the system can recalculate and apply the updated amounts. If lease payments are not dependent on such variables, be sure to exclude them from lease asset and liability calculations.
Integration with the General Ledger
Lease accounting software can be integrated with your company’s General Ledger. This means that all required G/L entries are created automatically on due dates and at the end of each accounting period. You can export transactions in either summary or detailed format and upload them into your accounting system.
If your business uses Microsoft Dynamics 365 Business Central as its ERP system, the integration is seamless. The software automatically generates files at the end of each period, ready to be imported into your financial system without manual intervention. It also enhances financial reporting by providing comprehensive information about your lease portfolio, supporting clear and accurate disclosures.
Final thoughts
Adapting to IFRS 16, ASC 842, and AASB 16 doesn’t have to be a struggle. With the right lease accounting software, you can automate complex calculations, keep lease data organized, and ensure full compliance — all while saving time and resources.
If you're looking to simplify your lease management processes, this is the right time to explore a solution that meets both your operational and reporting needs.
Related articles
How to find the best lease accounting solution for your business?
With the introduction of new lease accounting standards - IFRS 16, ASC 842, and AASB 16 - significant changes were made to how leases are reported on the balance sheet. These standards require lessees to recognize most leases as assets and liabilities. Companies with large portfolios of operating leases have been especially impacted. Ensuring compliance is not easy. It takes time, planning, and execution, but with the right lease accounting software in place, the process becomes much more manageable.
Choosing the right solution for your business can be challenging. That’s why we aim to help you make an informed decision. In this guide, you’ll find key information about how lease accounting software can support your business.
Making day-to-day lease accounting easier
Lease accounting software simplifies the transition to IFRS 16, ASC 842, and AASB 16 by helping manage routine and technical tasks more efficiently. It reduces manual work, minimizes risk, and saves time and costs. Whether your company manages 50 or 3,000 lease agreements, the software provides a structured and efficient way to stay compliant.
All lease data is stored in one centralized system, regardless of the number of agreements, statuses, or lessors. What used to be a major challenge for finance and administrative teams is now streamlined. Agreements are typically categorized into three main statuses:
New agreements under consideration
Active leases
Archived leases (expired or terminated)
Authorized users can easily access the relevant information, reducing confusion and improving team collaboration.
If changes are needed on an active lease, the system allows you to update data in just a few clicks. An audit trail keeps a record of all changes, ensuring transparency. Additionally, a dedicated database can store lessor information, including contact details and lease portfolios, making it easy to find what you need when you need it.
Smart tools for lease accounting
Having all your data in one place is a good start. Automated tools that do the heavy lifting are even better. Lease accounting software calculates lease liabilities and right-of-use (RoU) assets based on the parameters you provide, so you don’t have to do it manually.
Under the new standards, lessees must recognize nearly all lease agreements on the balance sheet. The system calculates the lease liability as the present value of lease payments, including amounts due at the end of the term and options to purchase or terminate. It also calculates the initial RoU asset value, which includes the lease liability, any lease payments made before the start date, initial direct costs, and estimated costs for dismantling or restoring the asset.
If anything changes — such as a remeasurement or lease modification — the system automatically updates the lease liability and RoU asset values and generates the appropriate General Ledger entries. This helps prevent discrepancies and keeps your accounting accurate.
For leases with variable payments tied to an index or interest rate, the system can recalculate and apply the updated amounts. If lease payments are not dependent on such variables, be sure to exclude them from lease asset and liability calculations.
Integration with the General Ledger
Lease accounting software can be integrated with your company’s General Ledger. This means that all required G/L entries are created automatically on due dates and at the end of each accounting period. You can export transactions in either summary or detailed format and upload them into your accounting system.
If your business uses Microsoft Dynamics 365 Business Central as its ERP system, the integration is seamless. The software automatically generates files at the end of each period, ready to be imported into your financial system without manual intervention. It also enhances financial reporting by providing comprehensive information about your lease portfolio, supporting clear and accurate disclosures.
Final thoughts
Adapting to IFRS 16, ASC 842, and AASB 16 doesn’t have to be a struggle. With the right lease accounting software, you can automate complex calculations, keep lease data organized, and ensure full compliance — all while saving time and resources.
If you're looking to simplify your lease management processes, this is the right time to explore a solution that meets both your operational and reporting needs.