Eliminate manual calculations for renewals or terminations.
If no changes ever occurred after the original agreement, accounting for all types of leases would be simple. But numerous factors necessitate adjustments to lease accounting all the time for renewals, terminations, partial terminations and impairments. The more leased assets a company has, the more often such changes occur.
Most lease accounting solutions still have no ability to remeasure the amortization schedules for these updates to their lease contracts. Instead, accountants must create the adjustments manually. People usually do this in spreadsheets outside a software system. Or by creating an entirely new lease in the system that includes the lease modifications.
Each type of remeasurement requires its own calculations. These calculations usually end up taking at least 30 minutes each. And, of course, accounting teams have to save them for auditors according to ASC 842 leasing standards.
Why would any accounting team stick with manual tasks like this when automation is possible?
The most highly evolved lease accounting software automates remeasurements. Accountants just click on the type of remeasurement required. It's that simple.
With just a few more clicks, the software automatically remeasures the ROU asset and lease liability. Both of which are audit tracked as well. The system saves adjustments as part of the original lease amortization schedule. And thank goodness, it does so without the need for an entirely new lease record.