Complying with the new standards could be both tough and complicated. However, it takes just one accurately chosen solution to make this change a great adventure for your company and an interesting opportunity to learn something new. Get ready to meet the requirements and stay compliant with the standard with Soft4Lessee – lease software that is particularly designed to meet the requirements of ASC 842 and IFRS 16 without any headaches.
The system that comes from the Microsoft product family is easy to learn and use, helps you to manage multiple lease agreements with a large volume of data efficiently, and provides automated tools, which are useful in every step of the way.
Lease accounting software helps to manage multiple lease agreement’s data
Lease accounting software saves your time by reducing amount of hours spent on administrative work. Automated tools created to meet your needs makes any task smooth and efficient. Using lease software you can have a database of your lease agreements, with three major statuses – new agreements under consideration, active leases, and archived leases (expired, or terminated early). It means that even if you have thousands of lease agreements from different lessors and different statuses, all of the data will be accessible in one place and you will not lose it. In addition to this, keep in mind that if you need to amend any data on your active lease, you will be able to do it with just a few clicks. The system keeps an audit trail of all changes made, so you can feel sure that all of your active lease data will be transparent.
Furthermore, lease accounting software comes with a great set of tools for lease liability’s accounting. Based on the given parameters, the lease software calculates lease liability as the present value of the lease payments and the present value of amounts due at the end of the lease term, considering purchase or termination options. System will automatically adjust the lease liability as the circumstances change. The system calculates the initial measurement of the lease liability at the commencement date and subsequent measurements at the end of each reporting period (e.g., monthly, quarterly or yearly).
ASC 842 lease software and IFRS 16 software are designed to support compliance with ASC 842 and IFRS 16
IFRS 16 and US GAAP standard ASC 842 came into effect and influenced many companies, having large portfolios of operating leases. Both standards require all assets and liabilities regarding operating leases be presented on the balance sheet, thus the amount of work when preparing reports have increased heavily. Of course, ASC 842 lease software and IFRS 16 software lend a hand and help to overcome these changes without a headache.
Firstly, lease software provides ready reports, which you need for your financial reporting and prepare additional information for ASC 842 and IFRS 16 disclosures. In the Statement of financial position, you have to present right-of-use assets, per asset category (separately from other assets) and lease liabilities, separately from other liabilities. These are readily available from Soft4Lessee as an excel report and/or data file of G/L transactions for uploading to other systems. Software saves your time by completing half of the work automatically and prevents you from possibility of any human mistakes.
Secondly, just the same is done with a profit and loss statement, where you must present the interest expense on lease liability and the depreciation charge for the right-of-use asset. The non-lease component included in lease payments goes separately to operating expenses and all this is readily available from Soft4Lessee for reporting or uploading to other general ledger systems you may use.
Thirdly, ASC 842 lease software and IFRS 16 software helps to prepare Statement of financial position that is very important too. In the cash flow statement, it is required to present separate cash payments for the principal portion of the lease liability and interest portion. Soft4Lessee gives you the required breakdown of cash flows, handling payments for low-value and short-term leases, which are included in cash flows from operating activities.
Moreover, lease software helps you to get ready to meet the requirements and stay compliant with the standard by managing challenges of dual reporting with IAS 17 standard. For purpose of comparison and impact analysis, Soft4Lessee can calculate and post to General Ledge expenses as per previous IAS 17 standard.