Most lease accounting solutions have standard ASC 842 reporting functionality, like the one-page disclosure report. But the outputs don’t always include lease-level supporting details.
Without this information, accountants must manually pull amortization schedules from all ASC 842 leases. That way, auditors can 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 are. If we don't resolve these discrepancies, we document them as errors.
To produce manual roll forward reports, accountants have a lot to do. They must:
Pull separate reports from the ERP and their lease accounting software.
Manually perform VLOOKUPS in spreadsheets.
Tie the reports together.
This process could require searching hundreds of lease records, take days to complete, and is fraught with risk. Because auditors will test the assumptions.
There's one solution to all these reporting challenges. Accounting teams must ensure that they hold all amortization schedules in a lease accounting software system. And that the schedules have supporting audit details.
It must be a lease accounting software that can automatically produce disclosure and roll forward reports. As well as any other ad hoc reporting requests that ASC 842 requires. All with supporting details always included and formatted for audit presentations.