As you support Business Central customers who report under US GAAP standard, you are most probably aware of the new FASB ASC 842 accounting standard for leases. Non-public companies have to adopt the new standard for reporting periods starting from 15 December 2020 : NOW is the time for action.
As per the recent PWC report, 48 % of non-public companies are moving “full steam ahead” with ASC 842, despite a one-year effective date deferral. Up to 37 % of non-public companies will implement a new lease management system and 14 % will modify/upgrade their existing system in order to comply with ASC 842 standards .
ASC 842 is the most significant change to lease accounting in 40 years and impacts nearly every company that has leases. Over 80 % of companies have leases that need to be accounted for under ASC 842, most of which are material to financial reporting .
In essence, the major change is a requirement to capitalize operating leases on the balance sheet as lease liabilities and right-of-use assets. On “day one,” the initial measurement of the lease is based on the current value of future lease payments and RoU asset based on lease liability (with several other components added). On “day two” accounting, the lease liability is to be amortized using lease payments made and financing interest accrued, operating expenses are recognized straight-line, and RoU assets are depreciated on a declining balance basis (the difference between linear expense and interest on lease liability).
Your Business Central customers need a solution for ASC 842 NOW, and you can offer them:
- SOFT4Lessee app for Business Central cloud.
- SOFT4Lessee extension for your on-prem customers.
- SOFT4Lessee add-on for previous versions of Dynamics NAV (2018, 2017, 2016).
Customer can choose multiple from deployment options:
- Embedded into existing BC or NAV.
- Standalone solution for lease accounting only (upload leases from Excel, download monthly G/L journal).
SOFT4Lessee is a software solution for lease accounting under the new ASC 842 standard. Help your clients manage the transition with SOFT4Lessee, and easily earn up to 50 % margins.