Lease accounting audit details in reports are made easy with CoStar.
Auditors need evidence to support the calculations in financial reports, but many lease accounting systems don’t include lease-level details in standard disclosure, roll-forward and reconciliation reports. The lack of lease accounting audit details in reports creates hours of manual work for accountants who must provide and maintain the required supporting documentation in separate spreadsheets.
Lease Accounting Audit Details in Disclosure Reports
Most lease accounting solutions have a standard one-page disclosure report containing numbers for items required by ASC 842, but they lack lease-level supporting details auditors need to ensure the total amounts listed are accurate.
Missing details require accountants to pull amortization schedules from each lease record. Auditors then must tally the numbers to ensure they equal the total amounts on the disclosure report. If the reported amounts differ from the auditor’s totals, accountants must then spend additional time discovering where the errors lie. When these discrepancies can’t be resolved, they are documented as errors in the audit report.
In CoStar, all amortization schedules are in the lease accounting application, and supporting details for every lease are automatically published in the disclosure report.
Lease Accounting Audit Details in Roll Forward Reports
When supporting details are missing from a roll forward report, accountants must pull separate reports from their ERP and their lease accounting software, perform VLOOKUPS in spreadsheets, and tie the reports together. Accountants must search through hundreds of lease records to identify balance changes associated with additions, terminations, renewals, and impairments. They then must assume that balance changes not identified in their search were due to amortization and depreciation. This entire process can take days to complete and is fraught with risk, because auditors will test the assumptions.
Lease accounting software from CoStar automatically runs a roll forward report with all supporting details formatted for audit presentations.
Lease Accounting Software with CoStar
If your existing lease accounting software is missing these essential, time-saving functions – or if you’re looking to implement the company’s first solution – get the system that can do all this and more. CoStar. CoStar is trusted and recommended by more leading accounting firms and service providers to manage and report on real estate and equipment for compliance with ASC 842 and IFRS 16 guidance. If your lease data is already in a database, upgrading is easier than you’d expect. Schedule a demonstration for your team today.