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Understanding ASC 842 Compliance For Special Purpose Acquisition Companies (SPAC)

Understanding ASC 842 Compliance for Special Purpose Acquisition Companies (SPAC)

Companies looking to go public via a special purpose acquisition company (SPAC) often find themselves on an accelerated timeline to get their general ledger compliant with accounting standards. This process may include evaluations of ERP and other technology solutions. However, many systems that promise lease accounting capabilities fall short of the complete functionality needed to effectively meet ASC 842 guidance.

Here are 9 key functional areas where other software providers often fail to meet expectations:

  1. No Audit Details in Standard Disclosure and Roll Forward Reports.
  2. No Ad Hoc Reporting Flexibility.
  3. No Accounting Policy Compliance Checks or Validation of Lease Data.
  4. No Automatic Remeasurements for renewals, terminations and impairments.
  5. No Automatic Retrospective True-Ups after month-end close.
  6. No Flexibility to Split Amortization Schedules for purchase accounting and cease use adjustments.
  7. No Discount Rate Matching. 
  8. No Automatic Journal Entry Integrations with Approvals.
  9. No Ability to Add Company-Specific Fields.

Under-developed systems lacking these abilities can force accounting teams to spend countless hours creating manual workarounds in spreadsheets, leading to lost productivity, control issues and serious audit challenges.

If your existing 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. Search “CoStar Lease Accounting” to learn more.