Lease Accounting FAQ
Your lease queries, answered
What are the new lease accounting standards?
They are FASB ASC 842 and IFRS 16. In 2016 the FASB and IASB released ASC Topic 842 and IFRS 16. Simply put, these rules require all leases to be recorded as liabilities on the balance sheets. Click here to read our detailed summary of the key differences between the current and new standards.
What challenges are companies facing?
The challenges include gathering lease information, creating a central repository for all lease data, and determining what contracts contain embedded leases – just to name a few. To read more about these challenges in detail, read our blog here.
How will our current policies be affected by the lease accounting changes?
Most companies do not have a structured policy on leases. You will need to create one for the FASB ASC 842 and IFRS 16 updates. Click here for a free step-by-step guide to seamlessly transition to the new lease accounting standards under FASB 842 and IFRS 16.
What departments are involved in the new lease accounting compliance process?
This is going to affect your accounting, legal, purchasing, real estate, IT, financial reporting, FP&A, and treasury departments.
Need a bit of help with the lease accounting changes?
LeaseQuery provides lease accounting software to help companies easily comply with the new lease accounting rules. Our lease accounting software handles all types of leases: real estate, vehicles, equipment, capital leases, operating leases, lessee, and lessor.
How does LeaseQuery offer the best lease accounting software?
We are accountants just like you. Unlike other lease accounting software vendors, we aren’t former real estate professionals trying to learn accounting on your dime. LeaseQuery is staffed by accountants with diverse backgrounds who not only created our lease accounting solution, but also help companies like yours during the transition. We are the absolute best at what we do. Sign up for a demo today and let us prove it.
Who is affected by the lease accounting changes?
The new standards apply to public and private companies that have to issue GAAP financial statements. They do not apply to private companies that don’t issue GAAP financial statements. So mom-and-pop businesses will not be affected by the new lease accounting regulations.
Further details on how the lease account changes will affect your bottom line can be read here.
Is there a guide for the lease accounting changes?
Yes, see the link here: Transition Guide to the New Lease Accounting Standards under ASC 842 and IFRS 16.
Otherwise, if you are interested in an ‘easy button’ for the new lease accounting standards, schedule a demo with the accountants at LeaseQuery, send us a message through our contact us page, or call us at 1-800-880-7270.
Do I have a capital lease or an operating lease?
Often it is quite confusing to determine if your lease is a capital lease or an operating lease. That’s why we developed our free tool, the capital vs. operating lease test. The test is a quick (less than 5 minutes) review of your lease’s details. At the conclusion, you get an emailed result with the nature of your lease! That’s it. Quick, painless results that simplify a complicated accounting process. Click here to try it out.
How do I calculate present value?
Sometimes, the present value of a lease or rental agreement isn’t clear. We get lots of questions about how to calculate present value, so we decided to create an easy-to-use calculator that you can download as an MS Excel file. We offer these services in our lease accounting software, so you don’t even need to use Excel. Click here to download it for free.
This free tool will help you calculate the present value of your minimum lease payments. You can use this to determine the exact liability that will be recorded on your lease under the new lease accounting rules.
