LEASE ACCOUNTING SERVICESAccelerate the Required Implementation of the New Accounting Lease Standard (ASC 842)
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Reach GAAP Compliance
The long-awaited change to the lease accounting standard (ASU 2016-02, Leases (ASC 842)) took effect for non-public, calendar year-end companies on January 1, 2022. Under the new standard, companies must record a right of use asset and lease liability on the balance sheet for most leasing arrangements. Moore Colson has developed a solution that will allow your company to successfully and efficiently implement this standard and maintain compliance following implementation. We provide the expertise to navigate the complexities of implementation, calculate the right of use asset and lease liability, and identify the impact to your financial statements and disclosures, debt covenant calculations and important key metrics.
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Understanding the Impact on Your Company
Implementing the new standard may prove to be an overwhelming task for your company, especially if you have hundreds, or even thousands, of leases. In addition to the numerous types of leases that must be considered (e.g., office space, vehicles, equipment, etc.), companies face new challenges in identifying embedded leases in service contracts and reworking calculations to be in compliance with ASC 842. All of these items divert resources away from the ongoing tasks that are critical to keeping your business running smoothly. Moore Colson can help mitigate these challenges by acting as an extension of your team to successfully implement and maintain compliance with ASC 842.
Moore Colson offers several services to help you successfully implement and maintain compliance with ASC 842, all tailored to your specific needs. We are ready to begin working with you now to ensure you reach GAAP compliance.
Why Moore Colson? Going Beyond Compliance™
Although many accounting firms are offering services to implement and maintain the new lease standard, Moore Colson goes beyond compliance for our clients. In 1981, we first opened our doors as a consulting firm, and we continue to maintain a consultative approach in everything we do. And unlike most accounting firms, we use a true partnership model, which means every client has access to our entire team of experts. As a nationally-recognized and award-winning firm, Moore Colson has the experience and personal touch to shape your future and help your company grow.
How will we go beyond compliance for ASC 842?
Like our approach to all our other services, we will provide consultative advice as we assist you with implementing and maintaining compliance with the new leasing standard. Our experts will perform a comprehensive scoping of each project to identify the impact on debt covenant calculations, find key assumptions that management will need to address in connection with implementation, and provide observations and recommendations for the future. We strive to deliver value beyond compliance.
Lease Accounting Service Offerings
Our client-centered, tailored approach to our services is based on experience, expertise and the knowledge that every business and every client has unique needs. We provide the following lease standard accounting services:
- Determine the impact on your debt covenant or other calculations and lead discussions with the primary users of your financial statements and other stakeholders as necessary.
- Assist with identifying the lease population, ensuring completeness and accumulating all executed agreements and amendments.
- Populate the lease accounting model and calculate the right of use asset and lease liability.
- Provide guidance on significant judgmental assumptions inherent in the calculations.
- Lead and facilitate training for your employees.
- Review the implementation journal entries and advise on recurring entries to be recorded post-implementation to ensure accuracy.
- Assist with the maintenance of the model for new leases, amendments, terminations, etc.
- Advise as necessary on technical lease accounting matters, including modifications, amendments, expansions, tenant improvement allowances, etc.
- Assist with drafting the required footnote disclosures for the financial statements for the year ended December 31, 2022.