On May 12, LeaseQuery hosted another virtual LEASE summit, The FASB Series, during which accounting experts explored the new FASB lease accounting standard, ASC 842. Over 700 attendees of the free CPE event heard speakers from LeaseQuery, DHG, Riveron, Grant Thornton, Baker Tilly, and LeaseQuery customer, Middleby, discuss tips for a smooth transition and maintaining compliance.
ICYMI: May 2022 FASB LEASE Summit Highlights
Accounting professionals at the summit discussed details of ASC 842 as well as the best practices for implementation and ongoing compliance. Below, we have listed some of the most important quotes from the event. For more details, check out the May 2022 Lease Summit FASB Series Recap.
Mark Jistel, CPA — Director, Riveron
“The SEC had a big push on financial reporting, specifically on the lease front and making the disclosures more transparent and consistent. That required us to put those leases effectively on the balance sheet…now that the FASB has made that a requirement with a new standard, you have more transparency in regards to what future commitments look like and what that impact is on the balance sheet, which requires more input in disclosures, both from a qualitative and quantitative perspective. That will provide consistent and very useful information for financial users and stakeholders.”
Matt Tepfenhart – Managing Director, Riveron
“To help private companies, go to the SEC site and look at public companies, especially if you have comparable companies in your industry that you tend to target yourself against. They’ve already adopted, so they’re gonna have a disclosure that you can take a look at. You can get a sense of what the qualitative aspect looks like as well as the quantitative.”
“Depending on your lease portfolio, if you enter into an agreement for software, it is going to help you generate the quantitative disclosures on an annual basis. The thought process there goes away. You get the leases loaded correctly into the system, the system spits it out, you get your quantitative aspect, and you’re good to go. Ideally, if you go that route, it’s there. If you don’t, there are other ways to look at it. However, it’s a little more complicated if you have to pull it together in Excel.”
Cheryl Levesque – Partner, CFO & Business Advisory, DHG
“There’s always a lot of effort put around doing the actual adoption, but day two comes. You’re searching for embedded leases to make sure you have them, but if you put a process in place to make sure you can continuously monitor as you enter into new contracts…sometimes people forget to think about day two because they’re so focused on transition, but it happens right after.”
“Get help if you need it. It will take longer than you expect. There will be nuances depending on your portfolio and how complex it is…dedicate resources to the project or get outside resources to help. It’ll help your process and hopefully get a more accurate solution at adoption.”
Lisa Kaestle, Audit – Director, Accounting Advisory Services, at Grant Thornton Center of Excellence Lead
“Your adoption memo is really what did you do to get compliance with ASC 842 on day one? They want to know, who is on your implementation team? Who did you talk to from the business? How did you assess completeness? What expedience did you elect? Did you consider software, and if you did, how did you make that software selection? And again, do you want to continue thinking through what is your impact to your financial statements?”
Jeff Weinberg – Director, Baker Tilly
“The place to start, in addition to thinking about who will be involved from your company to help implement, is making sure initially you have identified all of your lease agreements and any amendments of those agreements, that they have all been inventoried. That’s an important place to start and we don’t want to underemphasize it…it can slow down implementation if you’re having difficulties finding these agreements.”
Summary
Attendees of the LEASE Summit – The FASB Series heard valuable insights for implementing ASC 842, including best practices for adoption and tips for your first post-transition audit. For more information about what was discussed, check out the summit recap.
