Lease accounting compliance with the new ASC 842 standard is a significant undertaking that requires a hard look at current lease management practices in place, and consideration of a new lease accounting software solution. While the purchase of new lease accounting software is a complex decision, when done well it represents many opportunities to generate ROI through the efficiencies and effectiveness gained. And implementation of new lease accounting software can be successful with the right transition team in place.

Selecting the right partners

Aligning with the right partners and advisors is instrumental in successful lease accounting software implementation and compliance. Specifically, the right accounting advisory service, lease data services provider, IT and software provider who can provide the guidance and resources available for the following:

Accounting Advisory Services Partner

• Accounting policy decisions
• Internal process mapping and improvement
• Real estate and equipment data management

Lease Data Services Partner

• Close real estate lease data gaps
• Locate, abstract required equipment lease data

IT Project Services, Configuration & Implementation Partner(s)

• Testing, documentation, post-implementation audit

Enterprise Software Provider

• Software, integrations, hosting, customer support

Recommended Lease Accounting Software Implementation Plan

Once the partners are aligned, the project can unfold in 2 to 3 phases.

Phase 1: Essential system setup, AKA “Compliance Quick Start” performed by CoStar/Software provider and partner including:

• Environmental build
• Single sign on
• Setup and configuration
• Data migration (real estate and material equipment only)
• System training
• Compliance user acceptance test (using a sample set)
• Standard GL and AP integration
• Exchange rates integration
• Result: Go-live system essentials complete

Phase 2: Equipment data collection performed by Licensee and partner including:

• Equipment data collection and migration
• Accounting policies and controls
• ASC 840 reconciliation
• ASWC 842 and IFRS 16 setup and testing
• User training
• Result: Go-live with full compliance

Phase 3: Additional integrations and customizations as needed, performed by CoStar/software provider including:

• AP history
• Fleet/EQ supplier
• MDM
• Others
• Custom reporting

A major implementation effort is never simple, but with the right lease accounting software and resources in place, your project can go beyond critical path compliance requirements and provide benefits to the bottom line.