Name: Ane Ohm
How is LeaseCrunch impacted by delaying the new lease standard implementation for non-public companies?
Interest in our lease accounting software hasn’t slowed. CPA firms are successfully using the software to work through implementations for both public and privately held organizations, with many more firms telling us they’re working to keep momentum going with clients despite the delay.
To help those firms encourage clients to start now – rather than facing a time crunch again next year – we’re actually offering a 2-for-1 pricing promotion until the end of 2019.
What are some lessons learned by public companies that have already adopted the standard?
There are many. Here are the top ones that come to mind:
- Completeness. Properly identifying all leases across all locations is more complicated than many expected. There are so many things to consider about each lease, including lease and non-lease components, lease and renewal term, common area maintenance, embedded leases, and more.
- Timeframe. Due to the complexity of the standard, including the process of abstracting data from leases, I’m hearing the entire implementation process is taking about three times longer than most organizations anticipated.
- Impact to Users of Financial Statements. Don’t forget about potential impacts to banking relationships. Now that you’re adding lease liabilities to your financial statements, it could impact loan covenants. The best approach is communicating with financial institutions early in the process.
- Practical Expedients. The FASB provided a number of practical expedients and we strongly encourage organizations to adopt as many as feasible. It will simplify the entire implementation and adoption process.
I’ve always successfully managed my leases in a spreadsheet. Can I do the same for the new lease standard?
Unfortunately, no – at least I would strongly recommend against it. And I’m not just saying that as the CEO of a lease accounting software platform. I’m also a former PwC auditor and I can’t imagine having to audit all those complex calculations in a spreadsheet.
Here are the main reasons that spreadsheets simply aren’t feasible for implementing the new lease standard and managing your leases thereafter:
- Complex calculations: There are many complicated components of the new lease standard, particularly with the quantitative footnote disclosures that include a weighted average discount rate and weighted average remaining term.
- Navigating nuances: Another benefit of using software over spreadsheets is the guidance you get to add context or explain more complicated parts of the new standard. Spreadsheets don’t offer that assistance.
- Enormously time-consuming: It is much more time-consuming to manage the new lease standard in a spreadsheet as it has no pre-built calculations or workflows.
- Version and calculation control: When multiple departments and people are responsible for lease data, it can be difficult to share spreadsheets and have confidence that everyone is using the latest version.
- Lack of validation or security: A spreadsheet has no built-in data validations and minimal security options.
How does LeaseCrunch work?
LeaseCrunch is an easy-to-use lease accounting software built specifically to simplify the new lease standard. We designed it to be both affordable and scalable for CPA firms to use with clients of all sizes. Features include:
- Simplified policy election templates
- Lease classification and lease term wizards
- Easy, quick data entry
- Tool tips to guide the user through the process and answer questions about the new standard
- Error- and worry-free calculations (verified by an Agreed-Upon Procedures report)
- Automated journal entries and qualitative footnote disclosures
What are people saying about LeaseCrunch?
- “Very user-friendly.”
- “This looks like what we need.”
- “I close my eyes and this is what I picture when it comes to lease accounting software… extremely intuitive.”
- “This is outstanding, very impressive.”
- “You just relieved a lot of my stress.”
- “We wanted a software solution to make our life easier and someone we could lean on for help… LeaseCrunch fits that bill.”