“Some companies may have ample resources to spend hours updating spreadsheets, but the accounting departments of most companies do not,” said Ane Ohm. CEO of LeaseCrunch
MILWAUKEE, Wis. (PRWEB) July 01, 2020
LeaseCrunch, the only lease accounting software made by former CPA firm auditors for CPA firm auditors, today announced the launch of their free lease accounting calculator, which quickly shows cost savings between lease software and spreadsheets.
“Some companies may have ample resources to spend hours updating spreadsheets, but the accounting departments of most companies do not,” said Ane Ohm. CEO of LeaseCrunch. “And because operating leases—especially for real estate—are often a material change to the balance sheet, more senior-level individuals are involved than before. So we developed the LeaseCrunch calculator which shows how much time can be saved by switching form spreadsheets to lease accounting software.
The LeaseCrunch calculator covers costs related to:
- Generating monthly journal entries -- Generating a monthly journal entry to import into your accounting system, properly including all existing, new, and revised leases. This includes breaking it down by reporting entity and cost center, as needed.
- Lease revisions -- Making proper adjustments to the ROU Asset and Lease Liability as of the decision date to properly account for the revised lease terms on a going-forward basis only.
- Annual quantitative footnote disclosure -- Broken out by operating and finance lease, calculating the lease expense, cash flow, discount rate, remaining years, and maturity schedule for future payments.
- Setup -- Creating reporting entities, locations, cost centers, general ledger accounts, and establishing currencies for all journal entries, amortization schedules and footnote disclosures.
- Policy elections -- Determining the advantages and disadvantages of each policy election and selecting the option that provides the most benefit.
- Documenting lease classification -- For every lease, considering and documenting each of the five criteria to determine the classification of finance or operating under ASC 842.
- Contract review for embedded leases -- Reviewing each contract for assets that fall within the definition of a leased asset (also known as embedded leases).
- Considering reasonably certain renewal or termination -- For every lease, considering and documenting whether you are reasonably certain to exercise renewal or termination clauses.
- Inputting each real estate lease -- Using documentation for each lease, identifying and entering relevant data required to calculate the initial ROU Asset and Lease Liability, ongoing monthly journal entries, and quantitative disclosures on the financial statements.
- Inputting each non-real estate lease - Using documentation for each lease, identifying and entering relevant data required to calculate the initial ROU Asset and Lease Liability, ongoing monthly journal entries, and quantitative disclosures on the financial statements.
With lease accounting software, ongoing maintenance is exponentially faster than with spreadsheets. Spreadsheets are fragile and formulas are easily broken, especially when several people are working in the same document. Add to that the additional work the new lease standard brings, such as calculating annual quantitative footnote disclosures, and ongoing maintenance takes up a lot of time for public companies and their auditors—meaning it also becomes more expensive.
“I spoke to one manager from a CPA firm who was surprised at just how many Day 2 challenges occur with the new lease standard,” continued Ohm. “In our conversation, he referenced two of his public clients, one with 1,400 real estate leases and a retailer that had 700 leases—all of which were being managed in spreadsheets. Imagine what happens when one of those formulas breaks?”
For more information on the LeaseCrunch calculator, go to: https://www.leasecrunch.com/the-time-saving-calculator
Named by Accounting Today as one of the top new products of 2019, LeaseCrunch provides cloud-based lease accounting software for CPA firms, designed to help organizations implement the new lease accounting standards, ASC 842 and IFRS 16. Designed by CPAs, former Big 4 public accounting auditors, software development veterans and a former member of the FASB staff, the application offers an easy-to-use customer interface that delivers “audit in a box” lease accounting services, reducing the time it takes clients to prepare for an audit. LeaseCrunch allows companies to identify policy elections for the leasing standard through templates for both US GAAP and IFRS. For more information go to: http://www.LeaseCrunch.com