How to manage ASC 842 lease compliance?

In all areas of human evolution, improvements have been made to make everyday life easier for everyone. In the technical sector, for example, revolutions have taken place, while in the world of procedure, new rules have been developed. In the field of accounting, international bodies have decided to establish ASC 842. Through this article, find out how to manage compliance with ASC 842.

The scope and cause of the new rule !

In business accounting, it is important to note that every transaction must be recorded in a written document, in this case the accounting journal and the general ledger. Thus, by checking these documents, a balance sheet can be drawn up for each year-end. It should be noted that the company's acquisitions and movable or immovable objects are included in the latter’s expenses’ column. This is where ASC 842 comes in. Prior to the creation of this standard, only real estate acquisitions were accounted for as housing, while buildings leased by the company are considered expenses. With the introduction of this new standard, all real estate used by the company must appear in the accounts as movable acquisitions, whether purchased or leased. This is for reasons of financial transparency, especially for tax purposes. For more information, please visit https://www.leaseinsight.com/.

Through the accountant !

In order to manage this compliance with ASC 842, the first step is to contact the company's accountant. Indeed, the accountant is the first person responsible for entering all the company's leased properties in the accounting documents. The accountant must therefore be aware of the existence of the new regulation. To do this, he can, on the one hand, document himself and look for information on the web or in the books. However, while this method can be somewhat accurate, it is not sufficient because some details may not be obvious to everyone. This is why professionals in the field organise training sessions to enhance the skills of all accountants. The goal of these trainings and workshops is to give participants the ability to master ASC 842.

Software !

Today, technology has taken over the accounting profession. Thanks to programming tools, computer supercomputers now handle all the accounting for businesses. With competition in full swing, accounting software is becoming more and more powerful. The accountant only has to enter the values, and the computer does the rest.