Transitions and changes often bring questions and uncertainty. As private companies begin the shift to ASC 842 lease accounting, it’s normal to face a wide range of concerns. Fortunately, professionals who have already overseen successful implementations of the new accounting standard can offer valuable insight. In this article, we share lessons from real-world ASC 842 projects and address the most common questions private companies have about the transition.

Have trust in the long-term vision

One of the biggest takeaways from early adopters is the importance of thinking beyond adoption day. Too often, teams focus entirely on the transition and overlook that all accounting work moving forward will need to comply with ASC 842.

This can be a tough adjustment for accounting staff, which is why it’s crucial to familiarize the team with how processes will look after the transition. Senior staff, external US GAAP consultants, and accounting software providers can assist with the day-to-day work. However, to succeed long-term, the broader vision must be clear and aligned from the beginning.

Be prepared for the unexpected

Like any significant change, transitioning to ASC 842 will bring some surprises. Implementation might not follow the initial timeline exactly, and unplanned challenges can emerge.

Be ready to allocate additional resources, bring in external help if needed, and adapt to shifting conditions. That said, if you’ve already built a strong plan, consulted your internal team, and chosen the right lease accounting software, the chances of major disruptions are significantly reduced.

Choose the right lease accounting software

Legacy systems and traditional accounting tools are unlikely to meet the demands of ASC 842. This standard introduces more complex calculations, more detailed reporting, and stricter compliance requirements.

Relying on Excel calculators might work if you have just a few leases, but for any business managing a larger portfolio, this approach quickly becomes inefficient and error-prone.

The right solution is a dedicated, ASC 842-ready lease accounting platform. Cloud-based tools like SOFT4Lessee offer features designed for automation, centralized data, audit readiness, and ongoing compliance. With these tools, accountants can complete tasks faster, provide better insights, and reduce the risk of manual errors - all while keeping auditors satisfied. Many platforms can even be customized to reflect your specific organizational structure and reporting requirements.

Do your research

Private companies can learn a great deal from public companies that have already implemented ASC 842. There’s no need to start from scratch when so many resources and case studies are available. Online communities, third-party consultants, and software vendors can all provide valuable guidance.

Focus on leveraging best practices. Learn what has worked for others and apply those strategies to your own plan. Avoid delays, as most adopters report that the process takes longer than anticipated. Starting early helps you stay on schedule and avoid disruption.

Most importantly, choose a proven solution. Trusted software platforms like SOFT4Lessee offer more than compliance - they provide long-term value through process automation, better reporting, and seamless integration.

Understand the impact across departments

Your business operates like a clock - every department is a gear in a larger system. If one part fails, the entire operation can suffer. That’s why it’s important to understand how ASC 842 impacts not just accounting, but the entire organization.

Once implemented, your accounting team will need to create new accounts, update balance sheets, and manage new reconciliation and reporting tasks. Other departments, including finance, legal, and operations, will need to support centralized data sharing and interdepartmental communication.

With the right tools in place, these processes can become faster, more accurate, and more collaborative. Software solutions for ASC 842, like SOFT4Lessee, provide powerful forecasting, budgeting, and reporting features that benefit the whole organization.

Apply IBR or a risk-free rate for the transition

When transitioning to ASC 842, private companies must select either the incremental borrowing rate (IBR) or a risk-free rate for lease discounting.

While IBR may be more accurate, it also requires detailed analysis and is subject to closer auditor scrutiny. For many private companies, the risk-free rate is easier to implement and provides a more straightforward path to compliance - especially during the initial transition. However, whichever rate you choose, the calculation process and reporting must be handled with care.

Final thoughts

If your company is preparing for ASC 842, you don’t need to go it alone. Learn from public companies, follow the guidance of experienced consultants, and use tested solutions. We’ve already supported more than 100 successful IFRS 16 and ASC 842 implementation projects, and we’ve seen firsthand the difference that planning, preparation, and the right software can make.

Choose a tool like SOFT4Lessee, start early, involve the right people, and don’t be afraid to ask for help. With the right approach, your transition to ASC 842 can be smooth, efficient, and beneficial to your entire business.