Lease Accounting Services (ASC 842, GASB 87, and SFFAS 54)

Cherry Bekaert’s dedicated team of professionals can help you navigate the lease accounting standard changes and assist with your approach to implementing the new standard as well as updating your current accounting processes to incorporate this new class of transactions around lease accounting.

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Robust Lease Accounting Processes for Maximizing Business Efficiency and Minimizing Risk

The release of lease accounting standards such as ASC 842, GASB 87 and IFRS 16 has made it crucial for businesses to have strong lease accounting processes. These processes involve managing lease agreements, recording lease information, and complying with accounting standards to avoid penalties and legal issues. By implementing lease accounting processes, businesses can benefit from financial transparency, better-informed decision-making, and reduced administrative and operational burdens.

Key Benefits of Strong Lease Accounting Procedures

By having a clear understanding of all lease terms, businesses can better manage their leases and mitigate risks associated with leasing, such as lease terminations, renewals, and inaccurate accounting. Additionally, mature lease accounting processes can streamline lease management, reduce administrative burdens, and improve overall efficiency, which can save time and money. This can be particularly beneficial for organizations that have a large number of leased assets or properties, like government entities or retail, and distribution. By improving efficiency, businesses can reduce their operational costs and improve their profitability.

Technology-Driven Solutions

Cherry Bekaert offers assistance in implementing lease accounting processes and IT system solutions through strategic alliances such as LeaseCrunch and FinQuery. With Cherry Bekaert's dedicated team of professionals, businesses can navigate the lease accounting standard changes and approach implementation with confidence.

Next Steps: Lease Accounting

To implement the new standard, businesses should perform an inventory of all leases, evaluate the impact on historical financial statements, and proactively work with their bank to discuss the impact on loan covenants. By engaging the right advisor and implementing lease accounting processes, businesses can comply with accounting standards, accurately report lease information, and make better-informed decisions.

  • Performing an inventory of all leases: Begin gathering all lease-related documents to identify the key assumptions necessary to implement the new standard.
  • Evaluating the impact: Recast your historical financial statements using the new lease model so you can consider the impact on compliance with agreements tied to your entity’s financial statements.
  • Proactively work with your bank: Talk with your bank to discuss the impact on loan covenants and consider whether new or amendments to existing debt agreements are required.

Harness Technology To Drive Efficiency

By leveraging technology, organizations can move complex accounting out of spreadsheets and into a secure cloud environment with solutions that improve efficiency and CPA-approved calculations that eliminate errors and facilitate compliance across reporting with GASB, FASB and IFRS. A SaaS solution simplifies the lease process with operational tools, data integrity, accounting intelligence, and the specific disclosure reports required by auditors and regulators.

How We Can Help You

Whether you have five leases or 5,000, accounting for leases involves complex calculations and a number of new reporting requirements. Cherry Bekaert understands the impact of the lease accounting standards on your entity could be significant. We know this is not a one-time implementation issue.

Through proactive planning and engaging the right advisor, businesses can comply with accounting standards, accurately report lease information, and manage leases effectively. By implementing lease accounting processes, businesses can reduce risks, improve efficiency, and make better-informed decisions.

Lease Accounting Service Offerings

  • General diagnostic discussion with management
  • Access to a cloud-based, third-party software to input lease data
  • Consultation and interpretive guidance, including FASB, GASB, FASAB, and AICPA interpretations
  • Checklists and other tools for implementation
  • Assistance with tool identification and vendor evaluation
  • Assistance to management with identification of unknown or embedded leases
  • Assistance in identifying additional disclosures
  • Assistance in identifying additional reports and data needed
  • Review of your management’s lease policies and practices
  • Compare and contrast the ability of your current processes and controls and IT systems to meet the requirements of the new standards
  • Analysis of potential impact on debt covenants
  • Analysis of potential impact on compensation agreements
  • Reviews of public company filings for comparable companies in similar industries

Our Professionals

Connect With Us

Chase Wright

Accounting Advisory Leader

Partner, Cherry Bekaert Advisory LLC

Danny Martinez

Government & Public Sector Accounting Advisory Leader

Managing Director, Cherry Bekaert Advisory LLC

Alex Wiley

Risk & Accounting Advisory Services

Director, Cherry Bekaert Advisory LLC

Contact Our Lease Accounting Team