12 Step Lease Accounting Compliance Plan from CoStar

This guide – co-authored by the former lease accounting manager with the largest home improvement retailer in the U.S. – offers organizational leaders practical, real-world insight on how to create a lease accounting compliance plan.

Adding virtually every lease to the balance sheet is a big undertaking, but the benefits reach beyond accounting standards compliance. It is an opportunity to gain operational efficiencies and provide visibility into spending patterns around leases which can result in big savings. Keys to success include a comprehensive understanding of the new requirements, developing sound accounting policies, careful project planning, staff training and strategic software selection.

And while the initial push toward compliance with new lease accounting standards is important, it is equally important to ensure that the software and policies put in place will continue to be a valuable mechanism for acquiring business assets on an ongoing basis. Once a new system is implemented and processes are established, a company should develop a sustainable environment to monitor, control and continuously optimize leasing practices for “Day 2” and beyond.

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This 12 Step Guide to Lease Accounting Compliance provides a detailed framework that companies in any industry can take to successfully achieve compliance. Download the complete white paper for details on these essential 12 steps:

  1. Obtain a full understanding of ASC 842 and/or IFRS 16
  2. Set a compliance timeline
  3. Meet with a cross-functional group of leasing stakeholders
  4. Organize a project team
  5. Select a software solution for lease management and reporting
  6. Compile a list of all leases
  7. Evaluate compliance with existing ASC 840 accounting standards
  8. Evaluate the HR impact and adjust staffing/training plans
  9. Set internal accounting policies around leasing
  10. Evaluate the process flow for leases and adjust to ensure efficiency
  11. Review new processes, software, policies and pro-forma results with auditors
  12. Set up a sustainable process for managing leasing data

Additional highlights of this 12 Step Guide to Lease Accounting Compliance include:

  • Lists of who should be part of the core project team and stakeholders to involve
  • 10 essential questions to assess lease accounting solutions from software providers
  • 5 of the most important testing scenarios for lease accounting software
  • Where to find organizational leases and critical lease data points to collect
  • List of often overlooked embedded leased assets that are part of larger agreements
  • “5 Minute Quick Read” summaries of each step in the process

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