3 Ways Lease Accounting Automatic Remeasurements Can Be Easier

Lease accounting automatic remeasurements are made easy with CoStar.

Every time there’s a modification to a lease that creates a change in dates or fixed payments, both ASC 842 and IFRS 16 require lessees to remeasure the ROU asset and lease liability. Since there are usually several remeasurements throughout the life of a lease, companies often assume that all lease accounting systems provide automatic remeasurements.

They don’t. But CoStar does.

Lease Accounting Remeasurements in Spreadsheets

When lease accounting software lacks the ability to automatically remeasure the lease, accountants must perform calculations outside of the software. Impairments, renewals, extensions, data corrections, partial terminations, terminations, and full terminations all require their own calculations.

Working in spreadsheets, accountants must recalculate the lease liability using a revised net present value calculation and an appropriate discount rate. They also must recalculate the ROU asset using a variety of different calculations, depending on the cause of the remeasurement.

If the lease liability increases or decreases by an amount that’s different from the amount the ROU asset increases or decreases, a gain or loss will need to be calculated. Each time a lease must be remeasured manually, it could take hours of manual work.

Lease Accounting Automatic Remeasurements with CoStar

Lease accounting software from CoStar performs automatic lease remeasurements. Accountants can simply click on the type of remeasurement that is needed, and with just a few more clicks, the software automatically remeasures the ROU asset and lease liability.

All remeasurements are tracked to capture changes to be included in the roll forward report for audits.

Lease Accounting Software from 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.