Lease Accounting
Building a Stronger Foundation: Your Guide to Lease Accounting
The foundation of your business includes not just what you own, but what you lease. As your trusted business advisors, we’re here to help you navigate the lease accounting standards (ASC 842) and build a stronger financial structure together.
Understanding the Blueprint: ASC 842 Basics
If your organization leases assets like real estate, vehicles, or equipment, these standards will reshape how you report these commitments. Think of it as adding new rooms to your financial house – leases longer than 12 months now need their own space on your balance sheet.
What’s in the Framework?
A lease under ASC 842 must have three key building blocks:
- A physical asset at its core
- Your right to control or use the asset
- Clear identification of the specific asset
Common examples include office space, equipment, and vehicles. Digital subscriptions, intangible assets, and assets under construction follow different blueprints.
Building Your Implementation Plan
Let’s construct your path forward together. Here are the key structural elements to consider:
- Foundation Work: Debt Covenants: While these changes don’t alter your business operations, they may affect how others view your financial structure. Let’s work together to start conversations with your bank early.
- Design Decisions: Policy Elections: Together, we’ll choose the right policies for your organization – ones that balance simplicity with your financial goals.
- Framework Development: Processes & Controls: We’ll help you build efficient systems to manage lease decisions across your organization, often discovering cost savings along the way.
Let’s Build Together
We offer several ways to support your transition:
- Advisory Partnership We’re here to guide you through every step, answering questions and interpreting standards together.
- Structural Support Our relationship with technology partners provides you with robust software tools to manage your lease portfolio effectively.
- Implementation Team Our experienced team can help gather, analyze, and structure your lease data.
- Ongoing Management We can maintain your lease portfolio, letting you focus on building your core business.
Ready to Break Ground?
The time to start building is now. Let’s assess your needs together:
- Your current lease portfolio
- Existing processes
- Policy choices
- Implementation scope
Let’s connect and build a strong foundation for your lease accounting future.
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