Companies faced with the lease accounting compliance deadlines over the past 2-3 years opted for “quick and easy” standalone or offline approaches that emphasized basic compliance over long-term integration, efficiency, and scalability.

As a result, most of these companies are now grappling with major roadblocks when it comes to managing lease accounting compliance in relationship to overall business goals, especially when it comes to coping with dynamically changing lease portfolios.

One of the biggest shortcomings from taking the standalone solution approach is the narrow focus on cataloging existing lease portfolios and analyzing them against the new compliance criteria. In effect, this is like just taking a static snapshot of a constantly changing environment.

So, how can you overcome these shortcomings related to standalone or offline approaches?

Listen to our latest Podcast on Improving Cash Flow and EBITDA with Active Lease Management. During this podcast, John Froelich, Bramasol VP of Marketing and Strategy, discusses Active Lease Management and explains how it can improve visibility of lease portfolios and cash flow along with enhancing financial performance.

As public companies have worked over the past two years to comply with new ASC 842 and IFRS 16 leasing standards, they have taken a variety of paths to achieve the initial compliance requirements. Depending on each company’s specific requirements and the extent of their lease portfolios, their journey to compliance may have been comprehensive or might have taken a limited approach with a “path of least resistance” philosophy to minimize disruptions. 

However, those companies that took a limited approach using standalone solutions or spreadsheets are now discovering they’re stuck in a dead-end with regard to integrating and optimizing lease compliance within their overall business operations.

As the leading experts in SAP Leasing Solutions for ASC 842 and IFRS 16, we've seen it all and we know what works. Integration can be hard. Data validation is required far more than you expected and reporting is anything but a snap, especially if you need data from your ERP as well as your leasing solution. 

Many of you are in the midst of filing your first quarter ASC 842 adoption footnote disclosures.  If you used brute force and/or a limited-scope point solution, how did that go?   If you used a non-integrated solution, how did the reconciliations go between asset accounting and payments?  Excel spreadsheets are not a realistic long term solution. Feel like you’re stuck in a dead-end now? You don’t have to be!

Just as you’ve been preparing to become compliant, audit firms have been preparing as well; determining what and how to verify and validate your disclosures.  Bramasol determined that the best way for you to prove the accuracy of the data in your disclosures was to develop not only drill-through Disclosure Reports but also drill-through Validation reports. Your proof is in the details.

They promised that a standalone solution would work as well as any integrated solution and that integration and data management/migration were easy. And, that reporting is a snap. But is it really?

As the leading experts in SAP Leasing Solutions for ASC842 and IFRS 16, we know what works. Integration can be hard. Data validation is required far more than you expected and reporting is anything but a snap, especially if you need data from your ERP as well as your leasing solution. 

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02 ( “ASC 842”), Leases, which provides new guidelines that change the accounting for leasing arrangements.

In February 2016, the Financial Accounting Standards Board

(FASB) issued Accounting Standards Update (ASU) 2016-02 (“ASC 842”) Leases, which provides new guidelines that change the accounting for leasing arrangements. The new leasing standard becomes effective in fiscal years beginning after December 15, 2018

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02 ( “ASC 842”), Leases, which provides new guidelines that change the accounting for leasing arrangements.