">
BlogBanner.jpg

ASC 842: FASB provides an additional optional transition relief for companies

Posted by Julio Dalla Costa on Tue, May 22, 2018 @ 03:19 AM

LeaseAdministration-HotTipOn January 5th, 2018, the Financial Accounting Standards Board (FASB) proposed adding an optional transition method and another practical expedient for lessors to Accounting Standards Codification (ASC) 842, Leases, to reduce the cost and complexity of implementing the new standard.

With the proposed transition option, the FASB is responding to concerns raised by entities, particularly those that plan to implement new systems to comply with the guidance. These entities said that the current requirement to apply the new leases standard to the comparative periods presented in the year of adoption would be more costly and complex for them to implement than the FASB initially anticipated. 

FASBlogo

On March 7, 2018, the FASB approved the changes to the comparative reporting transition guidance, providing an optional transition method when adopting Topic 842.

So, what does this mean?

For many companies who recently implemented ASC 606 and used the modified retrospective approach had to recast their financial statements to the earliest periods presented. This meant that they had to go back two years to the earliest reporting period presented and incorporate the changes into the transition entry to retained earnings as the date of implementation.

At its November 29 meeting, the FASB proposed allowing entities the option to instead apply the provisions of the new leases guidance at the effective date (e.g., January 1, 2019), without adjusting the comparative periods presented. In the case of the adoption of ASC 842, if companies were to adopt on 1/1/2019, that means that companies would have to recast fiscal years 2017 and 2018 for the adoption of ASC 842.

For example, a calendar-year entity that adopts the standard on 1 January 2019 and presents two years of comparative financial statements applies the transition provisions on 1 January 2017 (i.e., the beginning of the earliest comparative period presented). Under the proposed transition method, the entity would apply the transition provisions on 1 January 2019 (i.e., the effective date).

Under the proposed new method for transition, companies will be allowed to continue using and presenting operating leasing under ASC 840 and then prospectively adopt ASC 842 on 1/1/2019. The proposal could simplify transition to the new guidance. For example, a lessee would not have to measure and recognize leases that expired prior to the effective date or consider the effects of each modification for leases that were modified more than once during the comparative period presented. Under the proposed transition method, entities could opt to continue to apply the legacy guidance in ASC 840, Leases, including its disclosure requirements, in the comparative periods presented in the year they adopt the new leases standard.

Entities that elect this option would still adopt the new leases standard using a modified retrospective transition method, but they would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. Entities would still be required to apply different recognition and measurement requirements in the post-adoption period to leases they entered before adoption and those they enter after adoption.

Group of three practical expedients

In addition to the optional relief proposed by the FASB, there was already the “group of three” practical expedients that was previously proposed and approved. The practical expedients apply to all leases in place at the time of transition. However, the practical expedients must be applied as a package.

The practical expedients are:

  • An entity need not reassess whether any expired or existing contracts are or contain leases.
  • An entity need not reassess the lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in accordance with Topic 840 will be classified as operating leases, and all existing leases that were classified as capital leases in accordance with Topic 840 will be classified as finance leases).
  • An entity need not reassess initial direct costs for any existing leases.

ASC842-TransitionExpedients

In addition, the standard provides this practical expedient which may be elected separately from the above:

An entity also may elect a practical expedient, which must be applied consistently by an entity to all its leases (including those for which the entity is a lessee or a lessor) to use hindsight in determining the lease term (that is, when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of the entity’s right-of-use assets. This practical expedient may be elected separately or in conjunction with the practical expedients noted above.

Summary:

By the additional optional transition method as well as the practical expedients, companies are being provided with significant relief for the adoption of ASC 842. However, companies that rely extensively on leases for operating assets, the transition is likely to be labor intensive even when applying the practical expedients.

 

 Rapid Leasing Compliance Solution Click Here to Learn More

Read More

Topics: leasing, FASB, Leasing-Hot-Tips, ASC842, SAPLeaseAdmin

Data Drives Everything: Do you know where your data is and how to use it?

Posted by David Fellers on Wed, May 16, 2018 @ 04:33 AM

For the past forty years, companies have been building all their financial and business decisions around information contained in traditional data structures. Virtually all financial systems, no matter who has designed them, have been built around relational databases.  This brings the same set of issues and challenges to every single system.

The primary limiting factor with every relational database is a relatively finite limit as to how much data it can contain without compromising performance.  In most companies, these finite relational database limits have already been outstripped by the flood of new data that is constantly being created.  In response, virtually all companies have resorted to segmentation of their information into different standalone databases for faster manipulation and management. 

For example, the General Ledger is often separated from sub-ledgers and other critical functions such as profitability analysis, revenue recognition and management reporting are relegated to standalone programs and dedicated servers.

DataSilos

Although the goal of segmentation is to achieve faster performance from each database, every time a function or data set is handled separately, informational gaps are created. This sets in motion a myriad of problems from different understandings of what is supposedly the same information based on where and how the data is stored.  The result is a need for constant reconciliation of data drawn from different databases and the imposition of rigid “data cleansing” processes before any decisions can be made.

Of course, these interim steps to cleanse and validate the data are cumbersome, time consuming and a big drain on productivity.  Managers can sometimes spend much more time debating the accuracy of each other’s data than they actually spend on making decisions.

In recent years, thought leaders have been grappling with the above issues in an effort to find effective ways of unifying these separate data repositories with the core processing of transactions.  Overall goals have been to increase accuracy, efficiency and performance by eliminating the need to massage, analyze, reconcile and move data before acting on it, while at the same time accelerating transaction speed.  Steady improvements in chip performance, memory speeds and in-memory software architectures have now made those goals achievable.

By leveraging the in-memory data and processing capabilities of the SAP S/4HANA architecture and S/4HANA Cloud deployment scenarios, CFOs can seamlessly unify their information landscape to remove the gaps and ease the pain-points arising from the artificial segmentation of information.

Instead of always grappling with reassembling disparate pieces of the picture this approach enables CFOs and staff throughout the company to see a holistic real-time view that encompasses all operational data sets and analysis capabilities within a single unified architecture.

In addition to improving both the access to and the ability to manipulate information, S/4HANA also dramatically improves real-time analytics performance because nothing must be moved, massaged or reconciled before the analysis.

With S/4 HANA you now have access to all the data in real time. So how does this change the paradigm for how we approach data? In the past we struggled to get data. You had to abstract it, put it into files and then use what you had. I know that as a user of data we had to think long and hard about what data we needed to answer specific questions.

The heart of this new unified approach is the Universal Journal, which now enables the long-sought after "Single-Source-of-Truth" for decision making. It embodies the concept that all the data is unified within an unsegmented database so that all processes and people see the same set of information in real time. 

This is possible because S/4HANA offers three transformative innovations:

  1. Enables a 7 to 10 times compression of data to greatly shrink the data footprint
  2. Takes the data off disk and puts it into main memory so it’s immediately available
  3. Makes real-time information available to front-line users via flexible S/4HANA deployment scenarios and personalized User Interface technologies

Leveraging S/4HANA has enabled a complete re-imagining of the whole financial architecture and structure of applications so that everything can be driven in real time from the single SAP Intelligent Digital Core.

SAPIntelligentDigitalCore

Once everyone is working with the same information and operating in sync with each other, the single-source-of-truth also begins to inform high-level strategies and long-term planning processes.   Instead of constantly struggling to understand where you are, the whole team can turn their focus and energies toward getting where you want to be.

Now that we have instant access to raw transaction level data, and are constantly adding more data with technologies such as Internet of Things (IoT) and machine learning, companies need partners, such as Bramasol, who are experts in deploying solutions with the agility and scalability to handle escalating data and transaction processing requirements.

Bramasol is a co-innovation leader in the implementation of the SAP S/4HANA (On-Premise and Cloud) to help customers achieve high-performance results with in-memory capabilities and extensible Digital Core. 

Our capabilities include leveraging S/4HANA technology in purpose-built offerings such as our Rapid RevRecReady Compliance Solution and Rapid Leasing Compliance Solution as well as helping our customers incorporate S/4HANA benefits into their on-going Finance Innovation initiatives.

Click here to request a demo of S/$HANA Cloud and get expert answers to your specific needs.

Read More

Topics: data integration, s4/hana cloud

New Rapid Compliance Solution for Lease Accounting Standards ASC 842 and IFRS 16

Posted by Bramasol Leasing Administration Team on Tue, May 15, 2018 @ 12:00 AM

LeaseAdministration-HotTipBramasol, the leader in compliance and finance innovation solutions, has announced a new, purpose-built product that reduces complexity and implementation costs, to give companies across a variety of industries a ready-to-deploy solution for lease accounting disclosure reporting and compliance.

In 2016, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) issued new standards for lease accounting: IFRS 16 & ASC 842, which must be implemented by 2019. Both IFRS 16 and ASC 842 are the result of a joint effort between the IASB and FASB to meet the objective of improved transparency, comparability and financial reporting.  These changes will impact virtually all companies, whether lessors or lessees.

Since the new leasing standards-setting process began, Bramasol has been at the forefront of addressing critical issues to help our customers get ready for both IFRS 16 and ASC 842. We have developed the Lease Administration Solution Engagement Roadmap (LASER) that brings together all compliance requirements, stakeholder needs and work-stream processes within a unified and disciplined implementation process.

The Rapid Leasing Compliance Solution further distills these overall efforts in a targeted solution, designed to help companies with straightforward leasing portfolios to cut through the complexity of the new standards and achieve compliance without excessive hassles or expense.

This purpose-built offering is designed for companies with up to 300 leases and includes:
- 5 Basic Scenarios for Real Estate, Movables, or both
- Set-up of Nakisa and/or RE/FX
- Standard data & document loading
- Security set-up
- Standard out-of-the-box disclosures and reports for ASC 842 or IFRS 16

Click Here to see more details on Rapid Leasing Compliance Solution

Rapid-Compliance-banner-social-new

 

Read More

Topics: Leasing-Hot-Tips, ASC842, SAPLeaseAdmin, IFRS16, RLCS

New Webinar Series: Demystifying the SAP Cloud Platform

Posted by Bramasol Financial Transformation Team on Tue, May 8, 2018 @ 06:39 AM

FinancialTransformation-HotTip

A recent blog post by Bramasol CEO Dave Fellers posed this important question: "How does a company go about getting targeted cost-effective compliance in the near-term along with a transformative path forward to overall Finance Innovation?"

He also explained that "for companies that are already invested in SAP technologies, the answer is S/4HANA and S/4HANA Cloud."

Looking at the SAP roadmap, it is clear that S/4 HANA is the future for all SAP-based companies and that virtually everyone will undertake migration projects to implement S/4 HANA over the next two to three years.

Given the reality of S/4 HANA as the core SAP technology platform, with the excellent and cost-effective S/4 HANA Cloud functionality available right now, Bramasol believes in charting a path that takes maximum advantage of today’s compliance-driven requirements to usher in tomorrow’s financial transformation.

The SAP Cloud Platform is SAP’s platform-as-a-Service allowing companies to extend and personalize on premise or cloud apps, build new and differentiating apps or integrate and connect cloud and on-premise apps to make digital access simple and streamlined.

Join SAP for this new six part webinar series to hear from SAP experts and third party analysts on key topics to help demystify and clarify many aspects of the SAP Cloud Platform that in turn will lead you to make more informed and accurate decisions as you continue your journey to the cloud. 

The webinar topics are as follows:

Discover How to Solve Business Problems Faster with SAP Cloud Platform 
Date: Wednesday, May 9, 2018
Time: 8:00 a.m. PDT / 11:00 a.m. EDT

Discover why SAP Cloud Platform stands out from the pack
Date: Thursday, May 24, 2018
Time: 8:00 a.m. PDT / 11:00 a.m. EDT

How SAP Jam can help modernize your intranet quickly and accelerate time to value
Date: Thursday, June 14, 2018
Time: 8:00 a.m. PDT / 11:00 a.m. EDT

Key considerations in choosing data persistence options in SAP Cloud Platform
Date: Thursday, June 28, 2018
Time: 8:00 a.m. PDT / 11:00 a.m. EDT

The Apple/SAP Partnership: Delivering Next Gen Intelligent Apps for the Enterprise
Date: Thursday, July 12, 2018
Time: 8:00 a.m. PDT / 11:00 a.m. EDT

Myth busting: Separate fact from fiction when considering your SAP cloud journey
Date: Thursday, July 26, 2018
Time: 8:00 a.m. PDT / 11:00 a.m. EDT

We urge you and your staff to attend one or more of these webinars to build a better awareness of the opportunities available with S/4HANA Cloud Platform. Click here to register for SAP Cloud webinars.SAP Cloud Platform webinar series

In the meantime, if you want some personalized help to understand specifically how these technologies can be applied to your business, click here to request a consultation and S/4 HANA demo from Bramasol experts.

Read More

Topics: FinancialTransformation-Hot-Tips, finance innovation

Join SAP Leasing User Group Meeting at EXXON, May 3, 2018

Posted by Bramasol Leasing Administration Team on Mon, Apr 30, 2018 @ 11:11 AM

LeaseAdministration-HotTipSAP Leasing User Group

Hosted by ExxonMobil
(Options for In-person or Online Attendance)

May 3, 2018 - 10 AM PDT / 1 PM EDT

Join us for the latest SAP Leasing User Group Meeting hosted by ExxonMobil, Bramasol and SAP. Pete Graham will chair a robust discussion on the latest issues and challenges on SAP Leasing Solutions. Solution and Accounting experts from Bramasol and Nakisa will be onsite to provide additional insights into the product and project based experience.

If you are looking for real answers on how you can use the SAP solutions to comply with ASC 842 and IFRS 16, then this is the place for you. The discussion will include ample opportunity for open Q&A to allow participants to get answers to specific questions.

Please join us in person at ExxonMobil for what promises to be a great meeting. 

ExxonMobil Global Services Company
22777 Springwoods Village Parkway (W1.4A.345) 
Spring, Texas USA 77389

This will be available both in person and as a remote dial-in for those who cannot attend in person.

Register Here to Attend Online 

If you plan to attend in person, please email your Name, Email and Company to jfroelich@bramasol.com and we will add you to the list.

LeaseAccounting

Looking forward to seeing you there!

Read More

Topics: Leasing-Hot-Tips, SAPLeaseAdmin

Explore how a fast-growing Pharma company turned to Bramasol to bring in systems to support their larger operations

Posted by Bramasol Financial Transformation Team on Thu, Apr 26, 2018 @ 08:10 AM

Our customer is an American manufacturer and multi-level marketing global giant which specializes in skincare products. They have built a premium skincare brand on a legacy of innovative dermatology-inspired skincare products which in turn are backed by clinical results.

The main problem the customer faced was that their hyper-growth was getting increasingly constrained by legacy systems which were transaction-based instead of process-based. Their 100% YoY growth was held back by the lack of business processes and automation, capable of handling near & long term growth plans. The best suited solution recommended by Bramasol was SAP Cloud ERP which was utilized to proactively automate their business value chain to support significant growth plans, and also integrated order entry, 3PL, and credit card processes.

 Project Drivers:

  • Replace legacy system - Replace the current system(s) with a new ERP solution to integrate all critical processes
  • Prepare for growth - The current system(s) were not able to handle the anticipated growth.
  • Better Control on Billing Cycle - Establish all steps of the billing cycle in one system with improved control and compliance checks
  • Transparency of Information - Improve management decisions through better reporting
  • Integrated Solution - Establish all critical business processes in one fully integrated system
  • Better manage operational cost - Retire all legacy systems, hardware and maintenance with a SaaS solution
  • Process efficiency - Utilize the best practices embedded in the SAP Business ByDesign solution

Fast Growing Pharma Company customer story

 How Bramasol Assisted:

  • Implemented SAP Cloud ERP to automate & support their key value chain operational processes.
  • Full Data Migration
  • Full automation of online order entry (Sales Order to Delivery to Customer Invoice), 3PL, and credit card processes

If you want to leverage significant new technology trends to get ahead of the curve on new requirements while fundamentally transforming and unifying financial systems; Do what many high growth companies have done contact Bramasol.

 

 

check our other customer stories here

Read More

Topics: Success Story, Customer Story, finance innovation, pharma

Compendium of Most Popular RevRec Blog Posts

Posted by Bramasol RevRec Team on Tue, Apr 24, 2018 @ 05:30 AM

RevRecReady-HotTip-12-1Sometimes as you move forward, it can also be helpful to take a look back and see how far we've come. 

During the past three years, Bramasol has been at the forefront of thought-leadership, creating purpose-built solutions, and helping customers with implementation projects in the Revenue Recognition arena.

We firmly believe that companies can proactively leverage compliance with RevRec (ASC 606 and IFRS 15) and Lease Administration (ASC 842 and IFRS 16) to help drive overall Finance Innovation initiatives.

As a RevRec industry leader and primary co-innovator with SAP on development and deployment of Revenue Accounting and Reporting (RAR) application, Bramasol has continuously published ebooks and hosted webinars on a wide range of RevRec topics.

Below are some of the most popular RevRec blog posts from the past few years:

 blog-graphic-24apr

LEARN MORE:
Join Bramasol at SAPPHIRE NOW and ASUG Annual Conference, June 5-7, 2018 in Orlando, FL

As leaders in compliance solutions, Bramasol will be showing the latest updates on RevRec and Lease Accounting as well as purpose-built packages and adaptable technologies for optimizing compliance within overall Finance Innovation solutions. We will be demonstrating the newest releases of SAP Revenue Accounting and Reporting (RAR) and SAP Lease Administration by Nakisa. In addition, you can see our purpose-built, turnkey packaged offering, RevRec Ready Rapid Compliance Solution for disclosure reporting.

 

 

 

Read More

Watch how Bramasol helped a leading High-Tech Equipment manufacturer rapidly comply with RevRec ASC606 & IFRS 16

Posted by Bramasol RevRec Team on Thu, Apr 19, 2018 @ 05:18 AM

The customer is a leader in the field of networking solutions, and designs, manufactures a variety of solutions from PIC and ASIC chips to complete hardware and software systems. These systems empower network operators to scale network bandwidth, accelerate service innovation and automate optical network operations. Service providers, cloud operators, governments and enterprises across the globe rely on their Intelligent Transport Networks to enable services that create rich end-user experiences based on efficient, high-bandwidth optical networking.

Once the customer decided to quickly comply with ASC606 & IFRS 16 and finalized on the SAP RAR 1.1 solution, they needed a partner that not only understood SAP RAR well but had a credible track record working with the high-tech industry. They were especially concerned with large data migration challenges that would require both standard as well as custom migration strategies.

With over 20 years of experience working with the High-Tech industry, Bramasol was the partner of choice and we quickly helped them to Go-live on SAP RAR 1.1. One of the major drivers to achieving this was the way Bramasol leveraged BRF+ to provide a solid framework for driving RevRec decisions scenarios. A mix of standard and customized solutions was also used to enable a smooth migration of legacy data to RAR. Post go-live, Bramasol continues to be a valued partner providing the customer with ongoing specialized support.

 In the words of the customer “Bramasol was crucial to our successful on-time launch.

 


If you have a challenging or a complex RevRec Project or you feel compliance with ASC606, IFRS16 is difficult, do what the fortune 500 do.. Contact Bramasol

 CS-Global High Tech & Equipment Company

Check our other Customer Stories

Read More

Plan Ahead to Join Bramasol at SAPPHIRE NOW and ASUG Annual Conference

Posted by Bramasol on Tue, Apr 17, 2018 @ 04:15 AM

Bramasol is excited to be at SAPPHIRE NOW and the ASUG Annual Conference, SAP’s biggest event of the year! Join Bramasol and learn the latest about our technology innovations and solutions for challenges facing the Office of the CFO in Orlando, June 5-7th’2018.

As leaders in compliance solutions, Bramasol will be showing the latest updates on RevRec (ASC 606 and IFRS 15) and Lease Accounting (ASC 842 and IFRS 16), as well as purpose-built packages and adaptable technologies for optimizing compliance within overall Financial Transformation solutions. We will be demonstrating the newest releases of SAP Revenue Accounting and Reporting (RAR) and SAP Lease Administration by Nakisa. In addition, you can see our purpose-built, turnkey packaged offering, RevRec Ready Rapid Compliance Solution for disclosure reporting.

You can stop by any time to see the latest from Bramasol at Booth Number: 1149.
Or join us for the following special sessions:

Session 1: ASUG11850 
Results Analysis with SAP Revenue Accounting and Reporting: Nuts and Bolts
Thu 11:00 a.m. - 12:00 p.m.  S331D
Chris Ritterhern - Bramasol

DescriptionIf your company’s revenue is project-driven, changes to the results analysis configuration associated with the SAP Revenue Accounting and Reporting application were either (a) a surprise or (b) a surprise. These changes were necessary for your process to function properly. Discover exactly what changed in results analysis and why.

Session 2: ASUG11142 
Disclosure Reporting and Analytics for the New Revenue Recognition Regulations
Thu 2:00 p.m. – 3:00 p.m. S320G
Trevor Lovegrove – Bramasol and Francie Gallagher - NextGen

Description: The SAP Revenue Accounting and Reporting application is a powerful tool to calculate and book numbers in compliance with the new regulations of ASC 606 and IFRS 15. Bramasol has developed a comprehensive package of reports and accelerators covering all mandated and operational reports. The presenters will discuss the analytics and reports and how they support projects for compliance.

Click here for more info on Bramasol's plans for SAPPHIRE. If you'd like to discuss your specific projects or requirements in Revenue Recognition, Lease Administration or Financial Innovation with S/4 HANA, click here to Book-A-Meeting.

Looking forward to seeing you at SAPPHIRE!

SAPPHIRENOW-banner-social

Read More

Topics: SAPPHIRE

Learn how Bramasol Helped a leading Global Publisher with complex RevRec scenarios

Posted by Bramasol RevRec Team on Thu, Apr 12, 2018 @ 06:41 AM

The customer is a global publishing company, which specializes in academic publishing. The company publishes electronic and print books, journals, and encyclopedias, as well as training and educational materials. The organization markets its products to a number of segments including professionals, students, instructors, researchers and more.

The company faced challenging issues around Digital Media, Multi-currency Intellectual Property and other areas in digital publishing.  They needed a partner expert in SAP RAR and who could guide their SAP SI with RAR integration, data migration and testing challenges.

As the clear leaders in design and implementation of Revenue Recognition solutions, Bramasol was the natural choice. We brought in experts who worked with the SI to develop unique solutions to address all the challenges. After the execution of the project, Bramasol continued helping the customer with expertise and guidance in the rollout of their RAR solution especially with regard to Testing and Data Migration.

Watch Customer Story Video

Customer Story_Global Publishing Company

If you have a challenging or complex RevRec project or simply want the leader in SAP Revenue Accounting, do what the Fortune 500 do, contact Bramasol.

Read More

Subscribe via E-mail

Request RevRec Consulting Support
Join the Rev Rec Ready LinkedIn Group

Latest Posts

Follow Me