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What Is Automatic Disclosure Reporting For ASC 842?

What is automatic disclosure reporting for ASC 842?

Previous to the new ASC 842 standard, a large portion of leases were relegated to the income statement and may have only appeared as a footnote on the balance sheet. However, under the new ASC 842 lease accounting guidelines, new lease disclosure requirements are intended to provide greater transparency and a better understanding of an organization’s leasing activities. Moving forward into 2020, lessees will need to disclose more comprehensive and complex quantitative information about leases, significant judgments made in measuring leases and the amounts recognized in the financial statements.  

A substantial amount of information is required to meet the quantitative disclosure requirements, and building a spreadsheet to track disclosures in-house is not a prudent compliance solution. Selecting the right software capable of providing the reporting for required disclosure information is a crucial part of the compliance process. Selection criteria should include software which is fully compliant with ASC 842 disclosure requirements and includes a streamlined system of automated calculations and workflows to help mitigate risk associated with disclosure reporting. The calculations required for the quantitative approach can be easily produced with the right technology. CoStar’s CPA-tested lease accounting software has already proven successful to help clients meet the challenges presented by lease accounting compliance, including the disclosure reporting functionality designed to meet the requirements of SAB 74. In fact, with the compliance deadline passed for public companies, some of the biggest brands trust CoStar to deliver their lease accounting and lease management needs. In addition to automatic disclosure reporting, the feature-rich lease accounting software solution from CoStar analyzes and classifies leases for new lease accounting requirements, calculates percentage rent obligations, adjusts indexed rents and related taxes, processes rent and expense obligations, generates journal entries, runs financial reports, and integrates with corporate accounting systems.