The Fusion of Technology and Data Standards

The collaboration between Visual Lease and OSCRE International exemplifies a synergistic approach to marrying technology with the rigorous development of data standards, significantly enhancing ESG reporting capabilities. Ian Cameron from OSCRE International emphasized the critical contribution of technology-focused companies like Visual Lease:

“It makes a real difference to us to have a clear idea of what kinds of data requirements fit, let’s say, energy data management… You are very much aware of that, and you’re sharing that, and again, that’s extraordinarily valuable because frankly, the proof is in the pudding at the detail level in these standards.”

This insight illuminates the importance of granular, technical knowledge in crafting standards that align with industry needs and bolster the integrity and functionality of ESG data.

The Pillars of Effective ESG Reporting: Integration and Implementation

A standout theme from our discussion is the imperative of data integration and strategic implementation beyond mere management. Bill Harter of Visual Lease discussed how working with OSCRE has enriched the evolution of Visual Lease’s solutions, particularly the VL ESG Steward platform. This tool represents a pivotal step forward, leveraging the collaboration with OSCRE to ensure comprehensive analytics and actionable ESG insights.

Leveraging OSCRE’s Work with VL ESG Steward

The VL ESG Steward platform is at the forefront of applying the insights and standards developed through Visual Lease’s collaboration with OSCRE, marking a leap from compliance to strategic advantage in ESG reporting. It underscores the importance of a seamless data flow and detailed analytics in providing organizations with the insights needed for impactful environmental stewardship.

Broadening ESG Reporting Horizons

The dialogue with OSCRE opens new avenues for expanding into scope three operations and beyond. This initiative is poised to offer more precise estimations for ESG reporting, aiding companies in the complex landscape of scope three emissions and broader ESG concerns.

A Comprehensive Approach to ESG Standards

The collaborative effort to develop ESG reporting standards is comprehensive. Ian Cameron’s work on process flows represents an all-encompassing strategy to ensure tools like VL ESG Steward meet users’ sophisticated needs, enabling organizations to exceed ESG reporting standards.

The partnership between Visual Lease and OSCRE is not just a collaborative effort; it’s a pioneering endeavor to redefine the future of ESG reporting. We’re establishing a foundation for a new era of sustainability and transparency in real estate and beyond through targeted technology, detailed data standards, and a focus on practical application.

Reflecting on the depth of the collaboration, Ian Cameron remarked, “You focus on the detail and the technical aspects of some of the stuff that probably passes by most people’s eyes… And that’s extraordinarily valuable because frankly, the proof is in the pudding at the detail level in these standards.” This encapsulates the essence of our mission – to empower organizations with the tools they need to demystify ESG reporting complexities and contribute to a sustainable future. This conversation highlights the transformative power of integrating robust data standards with cutting-edge technology.

Shaping the Future with Data Standards

OSCRE International, a non-profit dedicated to developing and implementing real estate data standards, plays a crucial role in facilitating digital transformation across the industry. With a focus on enhancing data strategy and management, OSCRE’s Industry Data Model spans leasing, space management, and, crucially, environmental data management. This broad and diverse model is designed around implementable use cases, such as lease data exchange, ensuring practical application in the real world.

“Our collaboration with industry leaders, including Visual Lease, is vital in developing standards that truly meet the industry’s needs,” shares Ian Cameron, Chief Innovation Officer at OSCRE. “By focusing on areas like energy data standardization, we’re addressing the immediate and future challenges organizations face in managing and reporting environmental data.”

Visual Lease and OSCRE: Collaborating on ESG

Visual Lease’s involvement in OSCRE’s initiatives, particularly around ESG, underlines our commitment to addressing the nuanced demands of lease management in the context of sustainability. As part of OSCRE’s Data Standards Committee, Bill Harter contributes insights and drives conversations on how best to integrate and implement these crucial standards within our solutions, including our newest product offering, VL ESG Steward.

“Working with OSCRE has been invaluable in enhancing our approach to data standardization and ESG,” notes Bill Harter. “This collaboration not only enriches our understanding but also ensures that our products, like VL ESG Steward, are equipped to provide actionable intelligence for companies looking to improve their operations and reduce their environmental impact.”

Beyond Compliance: The Vision for ESG Stewardship

The journey towards comprehensive ESG reporting is more than a compliance exercise; it’s about equipping organizations with the data they need to make informed decisions that benefit their bottom line and the planet. By integrating OSCRE’s standards and leveraging diverse industry perspectives, VL ESG Steward is designed to offer more than mere compliance. It aims to deliver actionable insights, enabling companies to track and analyze a wide range of ESG-related data and metrics effectively.

“The real goal of ESG stewardship is to provide companies with the tools they need to make a real difference,” explains Bill Harter. “As we look to the future, understanding the broader implications of ESG data, from energy management to water usage and beyond, will be key to driving meaningful change.”

A Unified Front for Data and ESG Standards

As Visual Lease continues collaborating with Ian Cameron, Bill Harter, and other industry leaders, our collective efforts are setting the stage for a new era of data-driven decision-making and sustainability in real estate lease management. Through initiatives like the Energy Standards Data project and beyond, we respond to current trends and anticipate our industry’s future needs, ensuring our clients are always one step ahead.

“In the realm of ESG and data standardization, collaboration is not just beneficial; it’s essential,” states Bill Harter. “Together, we are not only shaping the standards that will define our industry’s future but also ensuring that organizations have the tools they need to succeed in an increasingly complex world.”

At Visual Lease, we empower organizations to navigate these changes, leveraging our SaaS solutions to provide strategic, financial, and operational outcomes from their leased portfolios. As we move forward, integrating robust data standards and a deep commitment to ESG considerations will continue to be at the heart of Visual Lease’s work. By fostering collaboration and innovation, VL helps organizations navigate today’s challenges and build a more sustainable and efficient future.

Before the adoption of Visual Lease, the organization faced sustainability issues in lease management, compounded by new accounting compliance standards. The Director’s team, responsible for overseeing approximately 150 real estate leases and an additional 1400 equipment and vehicle leases, found an innovative solution in Visual Lease, marking a significant shift in how they managed their global lease portfolio.

The Challenges of Pre-Visual Lease Management

The lease management process was quite a hassle, relying on Excel spreadsheets and Lotus Notes as a makeshift electronic filing system. This method proved inefficient, especially with a lean team focusing on lease negotiations and strategic business needs. Searching for a more robust system led to exploring various platforms. Visual Lease stood out for its user-friendly and intuitive interface, simplifying lease abstraction and management tasks.

Visual Lease: A Catalyst for Efficiency and Collaboration

Adopting Visual Lease transformed the lease management process, empowering the team with tools to abstract leases efficiently, even with a lean staff. The platform’s ability to grant read-only access to stakeholders significantly reduced the overload of queries, enabling the team to focus on critical tasks. This accessibility and ease of use made Visual Lease an indispensable tool for the organization.

“One of our most important things that we can do is to provide good, reliable information in a timely manner to our decision-makers. Honestly, I believe that Visual Lease helps us do that, and it’s really been transformative, honestly, through my career here,” shares the Director, underscoring the pivotal role of Visual Lease in enhancing operational efficiency and decision-making.

Navigating Lease Accounting and ESG Reporting with Visual Lease

The transition to Visual Lease streamlined lease management and positioned the organization to adapt seamlessly to evolving lease accounting standards. The collaboration between the real estate and finance teams has been exemplary, ensuring data integrity and compliance with financial reporting requirements. Furthermore, as sustainability and ESG reporting become increasingly critical, Visual Lease’s potential role in supporting environmental and sustainability goals highlights its value beyond lease management.

A Future-Ready Approach to Lease Management

Visual Lease has become an integral part of Toshiba America Business Solutions daily operations, significantly impacting the organization’s ability to effectively manage a vast and complex lease portfolio. The Director’s participation in Visual Lease’s Customer Advisory Board reflects a commitment to continuous improvement and customer-centric development, ensuring that the platform remains at the forefront of addressing the dynamic needs of global lease management.
The journey with Visual Lease illustrates a transformative shift from fragmented and manual lease management practices to a streamlined, efficient, and collaborative approach. As organizations navigate the complexities of global lease portfolios, accounting standards, and sustainability reporting, Visual Lease emerges as a critical partner in fostering operational excellence and strategic decision-making.

Key Insights from Zena Thomas on GASB 96:

• Expertise and Experience: With over 20 years in the field, Zena’s extensive accounting background enriches Visual Lease’s product development, ensuring our solutions are deeply aligned with accounting standards.
• GASB 96 Overview: GASB 96 addresses the need for standardized accounting treatment for subscription-based IT arrangements, establishing a framework for capitalizing software costs.
• Comparison to GASB 87: While similar to GASB 87 in creating a right-of-use asset and liability, GASB 96 distinguishes itself with unique implementation stages, including preliminary, initial implementation, and operation/additional implementation stages.

  Our conversation dives into the complexities of the GASB 96 lease accounting standard, a subject of interest among government entities and other organizations. This standard marked a pivotal shift in the accounting of subscription-based information technology arrangements, aiming to normalize the capitalization of software costs. GASB 96 is was designed to mirror its forerunner, GASB 87, by establishing a right-of-use asset and a corresponding liability for these software arrangements. Yet, it sets itself apart by introducing distinct implementation stages not present in GASB 87. Zena Thomas shares:

  “GASB 96 is the accounting treatment for subscription-based information technology arrangements. It’s GASB’s response to questions around accounting treatment for software. Many entities were already capitalizing these costs, and they were looking for GASB to justify that treatment.”

  This in-depth discussion with Zena illuminates the importance of adapting to and implementing the GASB 96 standard, highlighting the evolution of lease accounting practices.

  Understanding GASB 96

  GASB 96 addresses the accounting treatment for subscription-based information technology arrangements, essentially acknowledging the evolving software capitalization landscape. The standard aims to provide a clear justification for this treatment, drawing parallels to GASB 87 but with notable distinctions, particularly in its initial stages.

  The Distinction from GASB 87

  While GASB 96 shares similarities with GASB 87, especially in amortization schedules, the differentiation lies in the initial implementation stages outlined by GASB 96:

  • Preliminary Stage: Costs incurred in the conceptual framework development are typically expensed as incurred.
  • Initial Implementation Stage: Costs associated with placing the asset into service are, for the most part, capitalized.
  • Operation and Additional Implementation Stage: Ongoing troubleshooting and maintenance activities may see a mix of capitalization and expense costs.

  Leveraging Technology for Compliance

  The transition to or concurrent handling of GASB 87 and 96 poses unique challenges and opportunities for organizations. While it’s feasible to calculate GASB 96 using GASB 87 methodologies, organizations are advised to employ specific platforms designed for GASB 96 to ensure accurate reporting and compliance. Visual Lease, for instance, provides a robust framework that can initially accommodate both standards, with plans to transition calculations to a dedicated GASB 96 module.

  Preparing for GASB 96

  For entities that were well-versed in GASB 87, the introduction of GASB 96 presented an opportune moment to begin preparations for compliance. Gathering data concurrently for both standards could streamline processes, offering a comprehensive approach to lease accounting standards compliance. With many entities still in the early stages of GASB 96 material development, there was a window for thorough preparation and strategy formulation.

  The evolution of lease accounting standards, evidenced by the introduction of GASB 96, underscores the dynamic nature of financial regulations and the imperative need for organizations to stay informed and prepared. As we navigate these changes, leveraging tailored technology solutions like those offered by Visual Lease can provide a strategic advantage, ensuring seamless compliance and optimized lease accounting practices. Whether deep into GASB 87 or just beginning your journey, now is the time to consider the implications of GASB 96 and how it will shape your organization’s future of lease accounting.

  The post The Great GASB 96: Insights with Zena Thomas first appeared on Visual Lease.]]> https://visuallease.com/uniting-lease-accounting-and-lease-administration/ Fri, 03 May 2024 13:00:23 +0000 https://visuallease.com/?p=9333 In the complex world of business, understanding the difference between lease accounting and lease administration is crucial. Although they might seem similar, they each have unique and important roles when...
  The post Uniting Lease Accounting and Lease Administration first appeared on Visual Lease.]]> In the complex world of business, understanding the difference between lease accounting and lease administration is crucial. Although they might seem similar, they each have unique and important roles when it comes to managing lease portfolio compliance, maintenance, and optimization effectively. Having a better grasp of these processes and using them strategically can significantly enhance an organization’s operational efficiency and compliance posture.

  The Essential Role of Lease Administration

  Lease administration provides essential support to the Office of the CFO by carefully managing crucial lease data needed for ASC 842 and IFRS calculations. This involves ensuring accurate and timely communication of data with accounting teams, and managing:

  • Lease Amendments
  • Lease Changes
  • Lease Terminations
  • This smooth coordination helps generate vital schedules and reports necessary for adjusting and meeting financial statements requirements.

  The Dynamic Nature of Leases

  Contrary to the one-and-done perception often associated with lease recording, leases are inherently dynamic. A lease portfolio is subject to frequent changes, influenced by variable expenses, one-time charges, escalation amounts, and indexation. This flux underscores the necessity for a robust lease administration process, emphasizing the importance of well-documented procedures and playbooks, particularly in managing the complexities of international leases.

  The Undervalued Effort of Lease Administration

  Often underestimated, the effort and time required to build and maintain effective lease administration processes are significant, especially in the context of mergers or decentralized operations. Organizing a global lease portfolio demands a considerable investment of time and a detailed understanding of the nuances involved in lease management.

  Strategic Planning and Lease Data

  Lease data holds immense strategic value, informing forecasting, impact analysis, and space planning. In a post-COVID world, with the shift towards flexible and remote work arrangements, up-to-the-minute lease administration and data are pivotal in supporting organizational strategy and operational flexibility.

  Critical Components of Daily Lease Administration

  Lease administration encompasses managing portfolio changes, variable expenses, and risk mitigation. This includes new leases, amendments, renewals, terminations, and acquisitions. A key aspect is managing common area maintenance and operating expense reconciliations, a significant area for potential savings and error minimization.

  Mitigating Risks through Process and Dual Controls

  A solid foundation of processes and procedures is essential for mitigating ongoing risks such as missed or delayed payments, manual errors, and fraud. Implementing dual controls, such as verification calls for changes in vendor information, can significantly reduce the incidence of fraud and cybersecurity threats.

  “Process, process, process. If you document your processes and follow through, you’ll mitigate most of your problems and be a proactive asset to your internal teams.” – Jamie Covert, President Scribcor Global Lease Administration

  The discourse on lease administration circles back to a singular, powerful theme: process. Documenting and adhering to well-defined processes mitigates most problems and positions lease administration as a proactive collaborator across internal teams, including strategy, transactions, and accounting. Looking ahead, the evolving landscape of Environmental, Social, and Governance (ESG) requirements and the critical role of space planning underscores the growing significance of lease administration in strategic decision-making and portfolio optimization.

  In the realm of lease management, understanding and leveraging the distinct roles of lease accounting and administration can yield substantial benefits, from enhanced compliance and operational efficiency to strategic insights and optimization of lease portfolios. As the business world continues to evolve, the value of these functions will only increase, making their mastery essential for organizational success.

  The post Uniting Lease Accounting and Lease Administration first appeared on Visual Lease.]]> https://visuallease.com/the-stevie-awards-name-vl-esg-steward-a-leading-compliance-solution/ Mon, 29 Apr 2024 13:35:45 +0000 https://visuallease.com/?p=9306 Visual Lease’s latest platform extension continues to gain industry recognition for helping organizations track and report on environmental impact data in accordance with all major frameworks and regulations Woodbridge, NJ...
  The post The Stevie Awards® Name VL ESG Steward™ a Leading Compliance Solution first appeared on Visual Lease.]]> Visual Lease’s latest platform extension continues to gain industry recognition for helping organizations track and report on environmental impact data in accordance with all major frameworks and regulations

  Woodbridge, NJ – April 25, 2024 — Visual Lease (VL), the #1 lease optimization software provider, today announced that VL ESG Steward was named the winner of a Bronze Stevie® Award in the Compliance Solution category in The 22nd Annual American Business Awards®.

  VL ESG Steward is the first tool of its kind within the lease management and accounting space. The software converts consumption data of greenhouse gas emissions (CO2, PFCs, CH4, SF6, N2O, HFCs) using calculations based on the Greenhouse Gas Emissions Protocol and EPA energy grid emissions factors. VL ESG Steward tracks a wide variety of environmental factors across an organization’s portfolio of leased and owned assets, including energy consumption, water usage, waste management and more, and automatically converts it into the standardized measurement of choice.

  “As regulations continue to evolve across the U.S. and abroad toward standardizing environmental reporting, companies are prioritizing their lease and owned asset portfolio to gain visibility into a key measurement – their current carbon footprint,” said Robert Michlewicz, CEO of Visual Lease. “VL ESG Steward extends the value of our industry-leading lease management platform, providing our customers with confidence in their lease data so that they can establish related benchmarks, reach corporate sustainability goals and ensure regulatory compliance.”

  The American Business Awards are the U.S.A.’s premier business awards program. All organizations operating in the U.S.A. are eligible to submit nominations – public and private, for-profit and non-profit, large and small.

  “We appreciate receiving this recognition from The 22nd Annual American Business Awards® for our innovative approach to a new and rapidly evolving business priority,” Michlewicz added. “VL remains committed to helping businesses successfully navigate the regulatory landscape while creating financial and operational value. VL ESG Steward is our next step in satisfying the growing demand for accurate environmental data among investors, consumers and employees alike.”

  In February 2024, VL ESG Steward was lauded as a Top New Product in 2024 by Accounting Today. In 2023, VL ESG Steward was recognized as a finalist for a Software as a Service (SaaS) award within the category of Best SaaS Product for CSR, Sustainability and ESG, and also named a Sustainability Product of the Year by the Business Intelligence Group.

  VL ESG Steward will also be part of the People’s Choice Stevie Awards for Favorite New Product in the Compliance Solution category. To vote for VL ESG Steward, visit https://peopleschoice.stevieawards.com/.  Public voting ends Friday, May 24.

  To learn more about VL ESG Steward, please visit this link.
  
  About the Stevie Awards

  Stevie Awards are conferred in nine programs: the Asia-Pacific Stevie Awards, the German Stevie Awards, the Middle East & North Africa Stevie Awards, The American Business Awards®, The International Business Awards®, the Stevie Awards for Women in Business, the Stevie Awards for Great Employers, the Stevie Awards for Sales & Customer Service, and the new Stevie Awards for Technology Excellence. Stevie Awards competitions receive more than 12,000 entries each year from organizations in more than 70 nations. Honoring organizations of all types and sizes and the people behind them, the Stevies recognize outstanding performances in the workplace worldwide. Learn more about the Stevie Awards at www.StevieAwards.com.

  About Visual Lease

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage more than 1 million real estate, equipment and other leased asset records globally. For more information, visit visuallease.com.

   

  Media Contact:

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post The Stevie Awards® Name VL ESG Steward™ a Leading Compliance Solution first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-reports-strong-q1-results-building-momentum-for-a-successful-2024/ Thu, 11 Apr 2024 14:37:34 +0000 https://visuallease.com/?p=9267 Woodbridge, N.J. –April 11, 2024 – Visual Lease (VL), the #1 lease optimization software provider, today announced its Q1 results, reporting sustained double-digit annual recurring revenue and customer percentage growth,...
  The post Visual Lease Reports Strong Q1 Results, Building Momentum for a Successful 2024 first appeared on Visual Lease.]]>

  Woodbridge, N.J. –April 11, 2024 – Visual Lease (VL), the #1 lease optimization software provider, today announced its Q1 results, reporting sustained double-digit annual recurring revenue and customer percentage growth, year-over-year.

  “At Visual Lease, we are witnessing a transformative year where Operational and Finance leaders are aligning to achieve value beyond baseline compliance requirements,” said Robert Michlewicz, VL’s Chief Executive Officer. “Our continued commitment to collaborating with our customers and partners allows VL to serve as a newfound system of record, seamlessly managing the entire lease lifecycle. We are proud to empower our clients by making lease operations, reporting and compliance sustainable – all while integrating data across their business to drive strategic financial and operational outcomes.”

  In Q1 2024, Visual Lease:

  • Named a Leader in nine G2 Spring 2024 reports, focused on how the platform is a fit for larger, more complex organizations, including: The Enterprise Relationship Index for Lease Administration, Enterprise Relationship Index for Lease Accounting, Enterprise Grid® Report for Lease Accounting, Enterprise Grid® Report for Lease Administration, Grid® Report for Lease Accounting, Grid® Report for Lease Administration, Mid-Market Grid® Report for Lease Administration, Momentum Grid® Report for Lease Accounting and Momentum Grid® Report for Lease Administration. This recognition validates VL’s unique ability to help systems and stakeholders across any organization work together to maintain accuracy as leases and regulatory requirements evolve.
  • Enhanced key platform functionality, including asynchronous reporting, empowering users to request reports while continuing their work elsewhere in the platform. VL also enhanced its Roll Forward Report to ensure continued, quality year-end reporting for its users.
  • Received accolades from Accounting Today, recognizing VL ESG Steward as a Top New Product in 2024. This is the third industry award that VL has received for VL ESG Steward since its launch in 2023.
  • Continued to elevate VL ESG Steward’s capabilities, introducing support for international energy grids, as well as support for estimates in addition to actual measures for carbon accounting. VL also introduced import templates to establish organizational and operational boundaries, and upload data and supporting documentation at scale across energy, waste, water, emissions, and climate risk.
  • Shared its in-house ESG experts’ perspective on the Security Exchange Commission’s final climate disclosure rule announced in March 2024 by hosting a news briefing with VL partner, FORVIS, and engaging with multiple publications, including Daily Mail, Bisnow, Globe St., Fortune, Yahoo! Finance and others.
  • Hosted its first Customer Advisory Board (CAB) meeting of 2024 for select customer representatives across organizations’ Finance, IT and Real Estate teams, providing a platform for all key stakeholders to discuss industry trends and share feedback on upcoming integrations and user experience enhancements.
  • Held its annual Sales Kick Off in St. Petersburg, Florida, gathering teammates across its sales and go-to-market organizations for several days of presentations, collaboration, and workshops. Two of VL’s valued partners, RSM US LLP and Baker Tilly, presented at the event.

  To keep up with additional announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage more than 1 million real estate, equipment and other leased asset records globally. For more information, visit visuallease.com.

  Media Contact:

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Visual Lease Reports Strong Q1 Results, Building Momentum for a Successful 2024 first appeared on Visual Lease.]]> https://visuallease.com/asc-842-summary/ Thu, 21 Mar 2024 16:30:32 +0000 https://visuallease.com/?p=6204
  

  Table of Contents

  • ASC 842 Lease Accounting
  • ASC 842 Summary of Changes
  • How to calculate a lease liability under ASC 842
  • How to Transition to ASC 842
  • ASC 842: Financial Statement & Calculation Impacts
  • ASC 842: additional reading
  • FASB Lease Accounting Updates
  • Lease Accounting Subtopics under ASC 842
    • Lessee accounting for finance and operating leases
    • Lessor accounting
  • ASC 842 FAQ
  • What is ASC 842?
  • Who Does ASC 842 affect?
    • Why was ASC 840 replaced with ASC 842?
    • How does ASC 842 change the balance sheet?
    • What is considered a lease under ASC 842?
    • How has lease classification changed under ASC 842?
    • What does a lease classification test tell you?
    • Is there a low-value lease threshold under ASC 842?
    • How is ROU calculated under ASC 842?
    • Why do embedded leases have a bigger impact under ASC 842?

  What is ASC 842?

  ASC 842 is an accounting standard issued by the Financial Accounting Standards Board (FASB) that governs the accounting treatment for leases. It requires companies to recognize lease assets and liabilities on their balance sheets for almost all leases, including operating leases, previously only disclosed in footnotes.

  ASC 842 Lease Accounting

  The purpose of ASC 842 is to increase disclosure and visibility into the leasing obligations of both public and private organizations. Where previously most leases were not included on the balance sheet, the new ASC 842 lease accounting standard requires companies to report right-of-use (ROU) assets and liabilities for almost all leases.

  These changes to financial statements make it easier for investors, vendors, government agencies, and business stakeholders to (1) see a company’s exposure to risk and true financial position, and (2) make comparisons between organizations.

  ASC 842 Summary of Changes

  The lease accounting standard ASC 842, replaces the lease accounting standard ASC 840.

  Why was ASC 840 replaced with ASC 842?

  Given the high cost of leases and their historical lack of representation on the balance sheet, the introduction of ASC 842 provides transparency into organizations’ lease liabilities.

  Before ASC 842, operating leases were not included on the balance sheet, which neglected to provide a full picture of cash flows from leases. This meant companies and investors were unable to identify how much debt was carried within a business’ lease obligations.

  The new lease accounting standard requires organizations to include operating leases and financial leases on the balance sheet, which increases visibility into leasing costs and arrangements. This ensures an accurate depiction of company financials.

  In addition, ASC 842 closely aligns with the new international lease accounting standard IFRS 16, especially in the way a lease is defined. This makes financial reporting more consistent for organizations with both U.S. and international lease assets.

  For more differences between the new standards, take a look at our IFRS & FASB Lease Accounting Changes page for a quick reference to all of the improvements.

  Who Does ASC 842 affect?

  ASC 842 affects private and public companies of all industries and sizes within the U.S., including construction, business services, healthcare, manufacturing, retail, hospitality, transportation and more.

  ASC 842 Lease Accounting

  The purpose of ASC 842 is to increase disclosure and visibility into the leasing obligations of both public and private organizations. Where previously most leases were not included on the balance sheet, the new ASC 842 lease accounting standard requires companies to report right-of-use (ROU) assets and liabilities for almost all leases.

  These changes to financial statements make it easier for investors, vendors, government agencies, and business stakeholders to (1) see a company’s exposure to risk and true financial position, and (2) make comparisons between organizations.

  Lease Accounting Updates

  Since FASB was issued ASC 842 in 2016, there have been numerous updates, such as:

  •       ASU 2017-13: Amendments to SEC Paragraphs
  •       ASU 2018-01: Land Easement Practical Expedient for Transition
  •       ASU 2018-10: Codification Improvements
  •       ASU 2018-11: Targeted Improvements
  •       ASU 2018-20: Narrow-Scope Improvements for Lessors
  •       ASU 2019-01: Codification Improvements
  •       ASU 2019-10: Effective Dates
  •       ASU 2020-02: Amendments to SEC Section on Effective Date
  •       ASU 2020-05: Effective Dates for Certain Entities
  •       ASU 2021-05: Lessors – Certain Leases with Variable Lease Agreements
  •       ASU 2021-09: Discount Rate for Lessees That Are Not Public Business Entities

   

  Lease Accounting Subtopics under ASC 842

  ASC 842 Lessee accounting for finance and operating leases

  Lessee accounting for finance and operating leases

  Under the previous guidance, ASC 840, leases were labeled capital or operating leases. However, their labels were changed to finance and operating leases under ASC 842.

  The criteria defining a finance lease is as noted under the guidance in 842-10-25-2:

  •         The lease transfers ownership of the underlying asset to the lessee by the end of the lease term
  •         The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise
  •         The lease term is for the major part of the remaining economic life of the underlying asset. However, if the commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not be used for purposes of classifying the lease
  •         The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments in accordance with paragraph 842-10-30-5(f) equals or exceeds substantially all of the fair value of the underlying asset

  If none of the criteria applies, then the lease would be considered an operating lease.

  Accounting for both the finance lease and operating lease are similar under ASC 842, unlike ASC 840. The new standard now requires both leases to recognize both the lease liability and the right of use asset on the balance sheet unless the lease is considered a short-term lease (12 months or less).

  Lessor accounting under ASC 842

  Lessor accounting has not had any significant changes under ASC 842. Similar to ASC 840, lessors still need to determine the type of lease to record, which will be either an operating lease, sales type lease or a direct financing lease.

  Under a sales type lease, the lessor is assumed to be selling a product to the lessee, which calls for the recognition of a profit or loss on the sale. For the lessor to classify the lease as a sales back lease, the lease must meet any of the criteria, noted within 842-10-25-2 (provided above) at lease commencement.

  Further, when none of the criteria in 842-10-25-2 are met, a lessor shall classify the lease as either a direct financing lease or an operating lease as noted within 842-10-25-3. The following criteria within the standard are as such:

  If both of the following criteria are met, the lessor should classify the lease as an operating lease:

  •         The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments in accordance with paragraph 842-10-30-5(f) and/or any other third party unrelated to the lessor equals or exceeds substantially all of the fair value of the underlying asset.
  •         It is probable that the lessor will collect the lease payments plus any amount necessary to satisfy a residual value guarantee.

  Otherwise, the lessor is to classify the lease as a direct financing lease.

  ASC 842: Financial Statement & Calculation Impacts

  Under ASC 842, almost all leases must be represented on the balance sheet with a liability and an ROU asset. ASC 840 capital leases and ASC 842 finance leases are substantially the same. Both are capitalized on the balance sheet, and the method for doing so is similar under both standards. Discover how the new ASC 842 standard impacts the balance sheet.

  How are lease calculations impacted under ASC 842? How can ASC 842 Compliance Software assist with these changes?

  ASC 842 requires lease obligations to be captured on the balance sheet. The calculations that are involved to stay compliant are extremely susceptible to error – particularly if done without automation.

  Lease accounting software assists with ASC 842 compliance by automating calculations and financial reports. It enables you to ensure reliable data – and provides transparency into the math behind the calculations.

  Without automated calculations or processes around lease management, you may run into issues related to human error or lack the ability to back up your calculations.

  ASC 842 Practical Expedients

  Businesses can elect practical expedients to apply the accounting guidance more easily. Depending on the type of practical expedient, they can be elected by lease, class of asset or as an accounting policy. Examples of practical expedients include:

  •         Initial direct costs for leases that commenced before the effective date
  •         The ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset
  •         Locking in a lease classification
  •         Combining lease and non-lease components
  •         Failing to restate the prior year’s financials

  ASC 842 Disclosure Requirements

  The disclosure requirements for ASC 842 are quantitative and qualitative. Under ASC 842, a lessee must disclose information about the nature of its leases and lease terms and conditions. This includes general descriptions of leases and various details regarding terms and conditions, such as the basis that variable lease payments are determined.

   

  ASC 842: additional reading

  

  ASC 842: Software

  

  ASC 842: Journal Entries

  

  ASC 840 vs ASC 842

  How does ASC 842 change the balance sheet?

  Previously, only capital leases — leases that are essentially purchase agreements — needed to be recorded on the balance sheet. But under ASC 842, most leases except for short-term leases must also be included on the balance sheet.

  In addition, FASB has changed the treatment of all leases to be intangible assets. This changes the terminology for capital leases, or leases that represent a purchase agreement. These leases are now called finance leases.

  This means companies must report ROU assets and lease liabilities for operating leases as well as for finance (capital) leases under ASC 842. So now IT and office equipment, vehicles, construction equipment, and other leased assets must appear on the balance sheet along with real estate leases.

  All the leases recorded under ASC 842 will now be part of the total reported assets and liabilities on an organization’s balance sheet — significantly changing the company’s financial statements.

  What is considered a lease under ASC 842?

  A lease is defined as a contract or an element of a contract that conveys the right of use (ROU) of a physically distinct identified asset for a specified period of time in exchange for payment.

  The identified asset can be property, plant, equipment, or other tangible assets. The period of time can be described in terms of the amount of use for the identified asset, such as the number of production units a piece of equipment will be used to produce, rather than in terms of time per se.

  Note: ASC 842 does not include assets that are covered in other accounting standards:

  • Intangible assets (ASC 350)
  • Minerals and biological assets including timber (ASC 930, 932)
  • Inventory (ASC 330)
  • Assets under construction (Covered under ASC 360)

  How has lease classification changed under ASC 842?

  Besides renaming capital leases “finance leases”, ASC 842 added a fifth lease classification question (“Is the asset so specialized that it is only useful to the lessee?”) to the test that determines whether a lease is a finance lease or an operating lease.

  Essentially, this question says that after the asset is returned to the lessor, if the asset will have no value to anyone else without a major overhaul by the lessor, then the lease would be classified as a finance lease.

  In addition, ASC 842 removed the so-called bright lines for the lease classification test. Previously these percentages were used to indicate what constitutes a “major part” of economic life (75%) or “substantially all” of the fair market value (90%); now these percentages are considered guidelines and you can elect whatever percentage you choose to use.

  • Transfer of title test: By the end of the lease term, will ownership of the asset transfer from the lessor to the lessee?
  • Bargain purchase option test: Is there a purchase option in the lease that the lessee is reasonably certain to exercise?
  • Lease term test: Does the lease term encompass the major part of the remaining economic life of the underlying asset?
  • Present value test: Is the present value of lease payments plus RVG (residual value guaranteed by the lessee) greater than or equal to substantially all of the fair market value of the asset?
  • Alternative use test: Is the asset so specialized that it is only useful to the lessee?

  What does a lease classification test tell you?

  Although almost all leases must be capitalized on the balance sheet under ASC 842, it is still necessary to classify them as either a finance lease (previously capital) or an operating lease. That’s because finance leases and operating leases are measured differently.

  The lease classification test determines whether a leased asset is essentially an alternative method of financing the purchase of an asset, or if the majority of the life and/or value of the underlying asset is controlled by the lessee; if so, it must be classified as a finance lease. Otherwise, the lease must be classified as an operating lease.

  Is there a low-value lease threshold under ASC 842?

  IFRS 16 includes a threshold under which leases can be considered “low value” and do not have to be capitalized on the balance sheet. However, FASB has not specified a low-value threshold for excluding leases from the balance sheet under ASC 842. If this is an issue for your organization, you can discuss it with your auditors to determine if you can use a materiality threshold.

   

  

  How to calculate a lease liability under ASC 842

  Lease liability represents the current value of minimum future lease payments. To calculate it, you need to make assumptions about:

  • The likely amounts owed under residual value guarantee
  • Whether you are reasonably certain to exercise lease renewal options, termination options, or purchase options

  The discount rate to use for the calculation is either the rate implicit in the lease (if known) or your organization’s incremental borrowing rate (IBR). Privately-held firms also have the option to use a risk-free rate.

  Keep in mind that the assumptions you make about lease options at the beginning of the lease often change over time. If during the term of a lease you change your mind about whether you are likely to exercise any lease options, you will need to remeasure both your lease liability and your ROU asset.

  How is ROU calculated under ASC 842?

  The ROU asset is calculated as the lease liability, plus or minus these adjustments:

  • Plus initial direct costs and prepaid lease payments
  • Minus lessor incentives, accrued rent, and ASC 420 liability at transition date

  Over the life of the lease, the ROU is amortized linearly. All of the assets and liabilities that adjust the ROU asset are reclassed from the balance sheet and included as one number to show the total leased asset.

  Why do embedded leases have a bigger impact under ASC 842?

  Previously, because operating leases were not on the balance sheet, embedded leases had little impact on the income statement since the expense was usually being straight-lined. But now that all leases must be capitalized on the balance sheet, you need to:

  • Examine all contracts to find any embedded leases within them
  • Separate the lease components (for use of assets) from non-lease components (payments for the service) within the contract

  Identifying embedded leases and their components is a complex task that takes time, judgment, experience, and consistency. It is another area where you might want to enlist the help and guidance of an accounting advisor.

   How to Transition to ASC 842

  Preparing for ASC 842 is a time-consuming, comprehensive effort that expands further than the accounting and finance department. It requires cross-departmental collaboration between IT, legal, procurement, etc.

  In fact, since the introduction of the new standard, impacted private companies have been slow to make the transition. In July 2021, The Visual Lease Data Institute (VLDI) reported 75% of surveyed private companies were not yet fully compliant with ASC 842. In addition, 40% said they were underconfident in their ability to comply with the new lease accounting standard because they didn’t have all the necessary lease data gathered.

  As of August 2022, The VLDI reported that while nearly all private companies (98%) have started the transition to ASC 842, one-third (33%) are still not fully prepared to implement the new standard.

  Businesses are under massive pressure as they attempt to prepare for their initial reporting period under the new lease accounting standard.

  The steps and milestones to ensure a successful transition to the new accounting standard are:

  •         Planning and analysis

  o   Determine project stakeholders and project lead

  o   Determine and approve budget for solution

  o   Collect and prep leases across portfolio

  o   Conduct needs assessment for a solution

  •         Software evaluation

  o   Kickoff software vendor evaluation

  o   Attend solution demonstrations

  o   Sign preferred vendor contract

  •         Implementation

  o   Gather business requirements and build timeline

  o   Complete software configuration

  o   Lease review, data analysis and entry

  o   Validation and testing

  o   Journal entry and disclosure pilot

  •         Go-live and transition

  o   Go live with software

  o   User training

  o   Adopt platform internally

  o   Transition to new FASB accounting standard

  •         Operationalizing and sustaining

  o   Ongoing maintenance (remeasurements, data management, change management)

  o   Annual reporting

  Benefits of New Standards and Implementation

  According to data from The VLDI, 71% of private companies believe ASC 842 presents an opportunity for their business.

  The new lease accounting standards encourage organizations to adopt a centralized view of their lease portfolio, providing them with an opportunity to prioritize a proper lease management strategy. In turn, this provides them with much of the information they require to remain adaptable in a post-pandemic world.

  Using a centralized system of record for leases provides companies with the ability to quickly and easily access crucial terms and clauses, such as the ability to exit, extend or change a lease.

  With this newfound visibility, companies can respond to unforeseen circumstances strategically, such as a retailer needing to shutter brick-and-mortar locations or exercise an exclusivity or force majeure clause to protect the future of its business.

  While some organizations manage and report on their leases using Excel, research has repeatedly shown that 90% of spreadsheets contain errors with 50% of processes enabled through those spreadsheets having “material defects”.

  Read More Content About ASC 842
  

  

  ASC 842 Compliance Software

  

  ASC 842 Balance Sheet

  

  Leasehold Improvements for ASC 842

  The post ASC 842 Lease Accounting first appeared on Visual Lease.]]> https://visuallease.com/unlocking-strategic-value-from-lease-accounting/ Fri, 15 Mar 2024 13:00:53 +0000 https://visuallease.com/?p=9164 It’s clear that the journey towards and beyond compliance with lease accounting standards (ASC 842, IFRS 16, & GASB 87) is fraught with challenges and opportunities. The strategic importance of...
  The post Unlocking Strategic Value from Lease Accounting first appeared on Visual Lease.]]> It’s clear that the journey towards and beyond compliance with lease accounting standards (ASC 842, IFRS 16, & GASB 87) is fraught with challenges and opportunities. The strategic importance of effectively managing a lease portfolio becomes even more apparent in today’s economic climate.

  The Evolution of Lease Management:

  The initial wave of adopting new lease accounting standards such as ASC 842 was not merely a compliance exercise but a transformative process for organizations worldwide. This transition period illuminated the potential for lease portfolios to significantly reduce risks and unlock real business benefits when managed with intention and strategic foresight.

  Maintaining Momentum in Compliance and Control:

  With the foundational compliance phase behind us, the enduring challenge for organizations is maintaining this compliance dynamically. This necessitates an integrated effort across various functions—real estate, finance, operations, legal, and procurement—to ensure information is accurately managed and utilized, minimizing exposure to risk and enhancing strategic decision-making capabilities.

  Insights from the Audit Front Lines:

  Audit and accounting professionals underscore the importance of meeting compliance mandates and leveraging the audit process as a strategic tool for refining lease management practices. Audits offer a unique lens through which to view lease agreements, providing opportunities to strengthen internal controls and operational insights.

  Emerging Topics on the Horizon:

  The transition to ASC 842 opened up a series of emerging topics that continue to evolve. The complexity of lease agreements and the dynamic nature of today’s economic environment call for ongoing diligence in lease management. The optimization and strategic advantage opportunities that arose during the initial adoption phase are just as relevant today, if not more so.

  Leveraging Lease Data as a Strategic Asset:

  The detailed lease data organizations have worked hard to compile and maintain is a veritable gold mine of strategic value. This previously underutilized information now allows management to make more informed and agile business decisions, optimize operations, and achieve cost savings on a previously unattainable scale.

  As we look back on the insights shared in the past and their application in the present day, the journey through and beyond lease accounting compliance emerges as a pathway to significant operational and strategic benefits. The detailed work required to achieve compliance offers a foundation upon which companies can build to streamline operations, negotiate better terms, and foresee future costs more clearly, transforming their lease portfolios into strategic assets that drive efficiency and savings.

  If you’d like to learn more about reducing risk and leveraging your lease portfolio to drive better outcomes, watch a quick overview of VL’s platform.

  The post Unlocking Strategic Value from Lease Accounting first appeared on Visual Lease.]]> https://visuallease.com/the-strategic-asset-of-lease-portfolios/ Wed, 13 Mar 2024 13:00:40 +0000 https://visuallease.com/?p=9162 Businesses have encountered unique opportunities to transform their lease portfolios from mere contractual obligations into dynamic, strategic assets. This evolution, spurred by effective management and the integration of cutting-edge technology,...
  The post The Strategic Asset of Lease Portfolios first appeared on Visual Lease.]]> Businesses have encountered unique opportunities to transform their lease portfolios from mere contractual obligations into dynamic, strategic assets. This evolution, spurred by effective management and the integration of cutting-edge technology, has allowed organizations to diminish risk and unlock extensive operational and financial benefits significantly.

  The Evergreen Nature of Lease Management:

  Historically, leases have represented one of the largest line items on the expense ledger for many companies, overshadowed only by payroll. This reality was often overlooked until the advent of new lease accounting standards (ASC 842, IFRS 16, & GASB 87), which prompted a paradigm shift towards more stringent lease accounting and lease administration processes to ensure continuous compliance.

  As we look back from our current vantage point, it becomes clear that for Chief Financial Officers (CFOs) and their teams, the initial push for compliance was just the beginning. The ongoing challenge has been to sustain these efforts, leveraging appropriate technology and establishing controls that span multiple departments. The absence of a unified approach to lease management exposes organizations to various risks, including financial inaccuracies and missed opportunities for savings.

  From Compliance to Strategic Advantage:

  The journey beyond compliance has revealed the untapped potential of lease portfolios as catalysts for greater financial agility and operational efficiency. Visual Lease has been at the forefront of this transformation, providing a robust platform tailored to meet the nuanced needs of all stakeholders involved in lease management. This centralized strategy mitigates risk and enhances compliance, ensuring that critical decisions can be made swiftly and confidently.

  The Ongoing Revolution in Financial Technology:

  Financial technologies, particularly those designed to streamline lease management and optimization, have proven indispensable. These tools have facilitated adaptability to the fluctuating economic landscape and supported the efficacy of virtual teams, proving essential for modern business operations.

  Conclusion: A Look Ahead:

  Reflecting on our journey through 2023, the importance of leveraging leases as strategic assets has never been more pronounced. The foresight and strategies implemented have paved the way for businesses to not only navigate the complexities of the present but also to lay a solid foundation for future growth and optimization. As we build on these insights, the potential for innovation and efficiency in lease portfolio management remains boundless, promising opportunities for those prepared to explore them.

  If you’d like to learn more about reducing risk and leveraging your lease portfolio to drive better outcomes, watch a quick overview of VL’s platform.

  The post The Strategic Asset of Lease Portfolios first appeared on Visual Lease.]]> https://visuallease.com/get-equipped-to-master-your-equipment-leases/ Tue, 12 Mar 2024 13:00:07 +0000 https://visuallease.com/?p=9160 As businesses navigate the complexities of the post-pandemic landscape, the question of whether to lease or buy equipment is more pertinent than ever. The global health crisis, followed by economic...
  The post Get Equipped to Master Your Equipment Leases first appeared on Visual Lease.]]> As businesses navigate the complexities of the post-pandemic landscape, the question of whether to lease or buy equipment is more pertinent than ever. The global health crisis, followed by economic fluctuations, has significantly impacted the equipment leasing market, prompting organizations to reevaluate their leasing strategies and financial planning.

  The Significance of Lease vs. Purchase Analysis

  A thorough lease versus purchase analysis is at the core of any equipment financing decision. This fundamental strategy supports organizations in determining the most cost-effective method for acquiring equipment, considering the net present value of after-tax cash flows, correcting residual assumptions, and setting appropriate discount rates. This analysis is crucial for boardroom-level decision support and auditing, ensuring businesses make informed decisions aligning with their financial goals.

  The Impact of the Pandemic on Equipment Leasing

  Despite the challenges posed by the labor market, supply chain issues, and inflationary pressures, we’ve seen record years for equipment financing. The Equipment Lease Financing Association projects the market to grow from $1.1 trillion in 2020 to $2.5 trillion by 2030. This surge underscores the shifting preference towards leasing as a strategy for cash preservation and financial flexibility.

  Navigating Lease Accounting Standards

  The relatively recent accounting standard (ASC 842, IFRS 16, & GASB 87) updates have spotlighted lease execution, contract terms, and management. These standards necessitate heightened transparency and control over leasing contracts, pushing organizations to adopt best practices for managing the life cycle of leases. Consequently, there’s an increasing demand for sophisticated lease accounting and advisory services to navigate these complexities and optimize contract savings.

  The Role of Visual Lease in Supporting Equipment Leasing

  In partnership with leading financial advisors, VL delivers comprehensive data and insights for managing equipment leases effectively. This collaboration ensures that organizations have access to the latest strategies and tools for lease analysis, contract management, and compliance with accounting standards, enabling them to realize significant savings and enhance their lease portfolio management.

  Preparing for Future Lease Transactions

  As companies adapt to economic uncertainties and evolving market conditions, the emphasis on strategic lease administration has never been more critical. Successful lease management goes beyond contract negotiation, encompassing a detailed understanding of lessor capabilities, contract terms, and overall portfolio strategy. Organizations that invest in developing baseline metrics for their leasing activities can measure improvement and achieve substantial savings over time.

  By embracing advanced lease versus purchase analysis and leveraging strategic partnerships, companies can confidently navigate this evolving market, ensuring their leasing decisions support long-term financial health and operational efficiency.

  If you’d like to learn more about reducing risk and leveraging your lease portfolio to drive better outcomes, watch a quick overview of VL’s platform.

  The post Get Equipped to Master Your Equipment Leases first appeared on Visual Lease.]]> https://visuallease.com/fund-accounting-for-leases/ Thu, 07 Mar 2024 15:34:35 +0000 https://visuallease.com/?p=9158 In the complex accounting landscape, fund accounting is a specialized area that demands meticulous attention, especially for non-profits, universities, hospitals, and governmental entities. Fund accounting is essential for these organizations,...
  The post Fund Accounting for Leases first appeared on Visual Lease.]]> In the complex accounting landscape, fund accounting is a specialized area that demands meticulous attention, especially for non-profits, universities, hospitals, and governmental entities. Fund accounting is essential for these organizations, as it helps track the allocation and usage of cash designated for specific purposes, ensuring that funds are not misappropriated.

  Understanding the intricacies of fund accounting is crucial for maintaining financial integrity and compliance, particularly when managing leases. Leases represent significant financial commitments and are subject to strict reporting requirements, making the accurate tracking and reporting of lease-related transactions a critical concern for accountants.

  The Challenge of Fund Accounting for Leases

  Fund accounting’s primary challenge is its need to precisely monitor cash flows and obligations within distinct funds, treating each fund as a standalone entity akin to a department. This approach is fundamentally different from traditional business accounting, focusing on ensuring that money designated for specific uses is spent accordingly.

  For governmental entities, this is further complicated by the need to satisfy the Annual Comprehensive Financial Report (ACFR), a comprehensive government-wide report detailing all financial activities and fund statuses, including those related to leases.

  Visual Lease’s Role in Simplifying Fund Accounting

  Visual Lease, a leading provider of lease accounting software, addresses these challenges head-on by offering solutions tailored to the unique needs of fund accounting. By automating the creation of journal entries that align with government-wide reporting and providing detailed insights into fund-specific transactions, Visual Lease enables organizations to maintain accurate and compliant financial records.

  Visual Lease’s platform offers flexibility, allowing users to integrate lease-related fund journal entries directly into their existing ERP systems or maintain them within Visual Lease for specialized reporting. This adaptability is crucial for organizations that manage their funds through separate ledgers or need to report on fund activities comprehensively.

  Understanding Accruals in Fund Accounting

  A fundamental aspect of fund accounting for leases is navigating the differences between modified and full accrual accounting. Most organizations are familiar with cash-based accounting, where transactions are recorded when cash changes hands. However, the shift to full accrual accounting under standards like GASB 87 requires recognizing expenses and revenues when they are incurred, regardless of when the cash transaction occurs.

  Government entities often operate on a modified accrual basis, focusing on short-term assets and liabilities alongside cash balances to provide a clear picture of a fund’s financial health. This necessitates maintaining dual sets of journal entries to comply with full and modified accrual reporting requirements, a complex process that Visual Lease simplifies with its robust software solutions.

  Setting Up for Success in Fund Accounting

  Successfully implementing fund accounting practices, particularly for leases, requires a deep understanding of an organization’s financial structure and the ability to track and allocate cash accurately. Organizations must have a clear organizational map from the outset, allowing for the precise movement and allocation of funds as needed.

  Visual Lease has proven to be an invaluable partner for organizations navigating the transition to GASB 87 and beyond, providing the tools and support needed to manage lease accounting with confidence and compliance.
  As organizations strive to adapt to evolving accounting standards and complex fund accounting requirements, the importance of leveraging specialized tools and expertise cannot be overstated. Visual Lease stands at the forefront of this challenge, offering solutions that ensure accuracy, compliance, and financial integrity in fund accounting for leases.

  The post Fund Accounting for Leases first appeared on Visual Lease.]]> https://visuallease.com/how-is-gasb-87-different-from-previous-standards/ Thu, 22 Feb 2024 13:00:58 +0000 https://visuallease.com/?p=9085 In this blog post, we will provide a comprehensive breakdown of GASB 87 and explain what you need to know. Revisiting the Introduction of GASB 87 The lease accounting standard,...
  The post How is GASB 87 different from previous standards? first appeared on Visual Lease.]]> In this blog post, we will provide a comprehensive breakdown of GASB 87 and explain what you need to know.

  Revisiting the Introduction of GASB 87

  The lease accounting standard, GASB 87, brought about a significant shift in how leases are accounted for. Previously, operating leases were kept off the balance sheet, but now they must be included. This change meant that public sector organizations saw a substantial increase in assets and liabilities on their balance sheets.

  How has GASB 87 Changed Lease Accounting?

  1. Increased Transparency

     Similar to the standards set by FASB and IFRS, GASB 87 aimed to bring more transparency to financial statements. With the inclusion of operating leases, stakeholders can now have a clearer picture of an organization’s leasing obligations. This increased transparency is essential for making informed decisions and understanding the financial health of an organization.

  2. Impact on Government Entities

     Governmental funds, including proprietary and fiduciary funds, experienced changes due to GASB 87. While fund balance accounting didn’t see significant alterations, comprehensive annual financial reports needed to reconcile fund balances with full accrual balances on government-wide financial statements. This alignment ensured accurate and comprehensive reporting of lease obligations.

  3. The Role of Lease Accounting Technology

     To navigate the complexities of GASB 87, implementing lease accounting software is highly recommended. This technology simplifies the calculation, reporting, and compliance processes, especially for organizations with substantial lease portfolios. By leveraging lease accounting software, organizations can maintain accurate records and alleviate the burden of continuous remeasurement and reporting.

  4. Managing Data Integrity and Internal Controls

     Adopting GASB 87 is just the beginning. Organizations must also prioritize the day-to-day management of lease data integrity and internal controls. Lease accounting software serves as a critical tool in this process, facilitating budgeting, cash flow forecasting, and document management. Strong internal controls are crucial for ensuring compliance and accuracy in lease accounting processes.

  5. Integration with ERP Systems

     Organizations have different preferences for integrating lease software with their general ledger systems. Direct integration between lease software and ERP systems can help reduce manual errors and streamline processes. This integration ensures seamless communication and data synchronization between different financial systems, improving efficiency and accuracy in lease accounting.

  In conclusion, GASB 87 has brought significant changes to lease accounting standards. Organizations need to understand these changes and adapt accordingly. By embracing lease accounting technology, maintaining data integrity, and preparing for future standards, organizations can navigate the complexities of lease accounting and ensure compliance with regulatory requirements.

  The post How is GASB 87 different from previous standards? first appeared on Visual Lease.]]> https://visuallease.com/a-complete-guide-to-commercial-lease-negotiations/ Wed, 21 Feb 2024 13:00:04 +0000 https://visuallease.com/?p=9083 Best Practices for Negotiating Ideal Lease Terms We’re diving into the intricacies of GASB 96, a significant standard that government entities need to adopt, especially following the implementation of GASB...
  The post A Complete Guide to Commercial Lease Negotiations first appeared on Visual Lease.]]> Best Practices for Negotiating Ideal Lease Terms

  We’re diving into the intricacies of GASB 96, a significant standard that government entities need to adopt, especially following the implementation of GASB 87.

  For most companies, leases and operating costs are usually the second largest expense behind payroll. Yet, after the initial negotiation, companies often don’t keep track of their lease terms or obligations — and that can mean missed opportunities, overbilling and wasted time.

  Because leases are such a big investment, the ability to negotiate or renegotiate a lease is a critical part of managing business expenses. Lease negotiation requires understanding lease components and their implications, and then using that information to negotiate the best lease terms for your business.

  A great way to prepare for negotiating a new contract or renegotiating with current lessors is to review your existing lease portfolio. It can help you get a good grasp of your obligations under different leases, which lease terms benefit you (or not) and how much flexibility there may be for negotiation.

  How to Negotiate a Commercial Lease

  In this guide, we’ll look at three ways you can prepare for and effectively manage your next lease negotiation:

  1. Identify Opportunities to Negotiate Within Leases
  2. Evaluate Your Existing Leases
  3. Seek Expert Advice

  Identify Opportunities to Negotiate Within Leases

  In general, negotiation plays a bigger role in commercial leases than in residential or consumer leases.

  That’s because:

  • Companies often have needs specific to their business, such as the way a space is configured or special requirements for utilities and other features
  • Lessors may be motivated to accommodate those needs to help seal the deal

  In addition, businesses are more likely to lease larger quantities of equipment, vehicles and other assets than a consumer would. Although these leases often require customized contracts based on individual companies’ needs, most commercial leases include some common terms and standard boilerplate language.

  These terms and language might be negotiated at the beginning of a lease and then automatically inserted each time the contract renews, with little or no changes over time. However, there are a few factors that can help determine the flexibility and ability to negotiate lease terms.

  Factors that Affect Negotiation Power

  The amount of flexibility you have to negotiate a commercial lease often depends on the circumstances. For instance, if it is close to the end of a lease term and your landlord wants you to renew, you may have an opportunity to renegotiate a lower cost or other favorable terms.

  Other things that may affect your ability to negotiate include the size and value of the leased assets. For example, you may have some leverage to negotiate with prospective landlords if you are looking for:

  • Prime locations for multiple retail stores
  • Significant square footage for warehousing, a showroom or manufacturing facilities
  • Multiple office spaces to accommodate doing business in different locations

  The ability to negotiate a lease also depends on the flexibility of the property owner or provider. A landlord who is anxious to fill a vacancy may be willing to negotiate an incentive for you to lease, such as a generous Tenant Improvement Allowance (TIA) for customizing an office space to your needs.

  Renegotiation of a lease in the middle of a lease term could be triggered by a hardship of some kind, such as a distressed market, a significant business disruption or even bankruptcy. In these cases, lessors may be more inclined to negotiate so that they get something rather than nothing.

  For example, if you lease a large amount of square footage or a highly visible location in a mall or office building, the landlord may work with you on desirable lease terms to avoid having the space sit empty.

  Lease Clauses in a Post-Pandemic, Hybrid Work World

  As the world recovered from Covid-19, corporate real estate planning became more complicated than ever. Businesses across all industries continue to be in cash-conservation mode, looking to cut costs and remain agile in response to economic uncertainties.

  Now, many leases directly consider and may include:

  • A pandemic clause, clarifying the rights and obligations of both parties in the event of unforeseen circumstances, such as future pandemics or other force majeure events
  • Health and safety protocols, specifying the measures each party must take to ensure a safe and healthy working environment, including sanitation, cleaning, and compliance with health guidelines
  • Dispute resolution for pandemic-related issues, establishing a clear process for resolving disputes related to pandemic-related matters, such as rent abatement due to government-mandated closures.
  • Government assistance coordination, describing how parties will cooperate in obtaining and managing government assistance programs that may be available during times of crisis.

  Even more so, there is now an emphasis on “hoteling” — an office arrangement where employees don’t have assigned workstations and instead reserve or use available workspaces temporarily — as well as spaces created with collaboration in mind, such as huddle rooms, team neighborhoods, and social zones.

  These may be incorporated through flexibility in space utilization clause, allowing for flexibility in the use of space, potentially permitting tenants to adjust the layout or configuration based on changing needs or social distancing requirements, or through a negotiated tenant improvement allowance to help offset the expenses associated with incorporating this new office needs.

  The widespread effects of the COVID-19 pandemic has had a strong impact on both lessees and lessors. On one hand, landlords whose properties have been affected want to recover as much rent as they can. At the same time, many tenants have been looking for some form of relief from their rent obligations had experienced some level of unoccupancy to their corporate real estate leased properties due to office closures. Still, nearly half (47%) of the companies paid full rent on unoccupied properties — and a small fraction (8%) paid no rent. Regardless, more than half the companies planned to ask landlords for some rent relief, such as application of their security deposit or a rent abatement, reduction or deferral.

  Tenants have looked to their leases for clauses like force majeure, casualty or business interruption to save money on rent.

  However, these clauses have not been commonly found to apply to COVID-19, given it was unusual to include specific language about a pandemic in lease clauses before the current climate. However, that is something that may change in the future through lease negotiations.

  Alternatively, some tenants and landlords have worked together during the pandemic on lease negotiations to ensure that both can stay in business during and after the crisis, and the landlord can continue to collect revenue from assets.

  Evaluate Your Existing Leases

  Your existing leases are a valuable source of information that can help your business negotiate new leases or renegotiate existing agreements.

  Any lease that has been customized to your business needs provides an opportunity for you to identify lease language that has worked in your favor. Moving forward, you can choose to establish that language as a standard to use in new leases or renewal negotiations.

  Conversely, if existing leases contain language that has not worked well for your business, you can try to avoid those terms in new contracts or renegotiate them at the time of lease renewal.

  What to Look for in Current Leases

  Naturally, you want to know what your rent and other lease payments are — but you also want a clear picture of what you are getting for the money. For example:

  • How many offices or how much space do you lease from the same landlord?
  • What is your cost per square foot?
  • Is the cost based on occupied space? Or on total square footage?
  • Is your rent comparable to what other lessees in the building are paying?
  • Is your monthly payment comparable to or better than the current market rates?
  • Are you paying for common area maintenance (CAM) and if so, how?
  • Are there other shared costs (such as water or other utilities) and if so, are you paying more than your fair share?

  In addition, you should look at your leases to determine whether your termination rights and renewal terms are favorable to your business. How easy is it for you to get in or out of leased spaces?

  • Is there a “lease kickout,” or a threshold that allows you to terminate a lease if the location is not operating profitably?
  • Is there a clause that allows you to terminate the lease on a retail location if there is a significant reduction in foot traffic or if an anchor store closes?
  • If you have multiple leases and critical dates with the same landlord, can you trade off and move locations to make the best use of all the leased spaces?

  Lastly, you should know where you are in your current lease terms, to be aware of automatic renewals, deadlines you must act on and possible opportunities to renegotiate before you renew.

  For instance:

  • If you have several leases with the same landlord — such as space in multiple offices or malls — how much of your portfolio is about to expire? If a large number of leases are involved, the upcoming expirations may give you significant leverage in negotiations.
  • Are your lease obligations short-term or long-term? If they are short term, you may soon have a chance to revisit lease language and make changes that will benefit your business.

  How to Search for Pertinent Lease Language
  With this kind of visibility into the details of your current leases, you are in a position to evaluate whether there is language you would like to renegotiate when a lease renews — or language you want to incorporate or avoid when entering into a new contract.

  Manually searching through every lease for specific clauses and language is an incredibly time-consuming and cumbersome task. (Just ask anyone who has implemented lease accounting standards — ASC 842, IFRS 16, GASB 87.)

  But by utilizing lease accounting and management technology, you can more clearly identify all your lease obligations and crucial lease language, which enables you to keep track of current financial obligations and critical dates, plus important details to help with future lease negotiations.

  For example, lease management software can help you identify if you paid for space you did not use — or overpaid for services such as cleaning or utilities. Armed with that information, you can look out for those issues in new leases or address them in current leases prior to renewal.

  With all your leases and important terms entered into a centralized system of record system, you can easily group information, generate reports and view a complete picture of your lease portfolio. You can also view individual lease details and cut data by region, landlord/lessor, expiration dates and other criteria.

  Creating a digital portfolio of abstracted leases lets you search for both ideal and low-performing lease language to:

  • Identify lease terms that previously worked well for your business and use them in new leases
  • Avoid under-performing language in new or renewing leases
  • Renegotiate where possible based on what works well and what does not

  The lease management system you choose should allow you to bookmark specific language and establish it as a standard that you want to repeat in the future, such as:

  • A previously negotiated, favorable holdover rent rate of 125%, versus the typical 150% or even 200%
  • CAM pro rata share language that bases the fee on the square footage of the space you occupy rather than the total square footage

  Further, a robust lease accounting and management system such as Visual Lease enables you to search for and identify automatic renewals on leases that you negotiated long ago, which gives you the opportunity to easily determine whether the terms are still favorable or if they need to be renegotiated.

  Seek Expert Advice

  Engaging with professionals, such as brokers or lawyers, can help you make smarter, more informed decisions about your leases. Lease experts can provide sound advice and help you better interpret and understand lease language, the current market conditions and your overall negotiation options.

  Consult a Broker

  Brokers are not experts in lease documents and legality. However, they can provide insights about the marketplace to help you decide whether to invest in a particular lease. For instance:

  • Does it make sense to sign a long-term lease at current prices — or are prices likely to come down further?
  • Do current lending rates make buying a better option than leasing in some markets?

  A broker can perform a market analysis, which includes the typical pricing in a given area. In addition, brokers often know the lessors and are familiar with their business and reputation — added information that can be helpful to you as a potential lessee.

  When you work with a real estate broker, they can help you better understand the current market and what is happening in neighboring communities.

  For example, in the aftermath of COVID-19, a broker can tell you if there are have been rising vacancies and falling rents in certain locations. Those are trends that may open the door to negotiating with owners who are eager to have their properties occupied and generating revenue.

  The same is true for equipment, vehicles and other frequently leased assets. There, brokers can tell you if prices are down or new stock is not moving — possibly giving you an opportunity to negotiate a price or opt to buy while the market is soft.

  Additionally, there are brokers who specialize in meeting different needs based on the health of a business and its goals. For instance, there are real estate brokers who help companies lease high-end spaces. There are also brokers who help companies during situations such as severe market downturns or bankruptcies.

  Still, remember that brokers are not experts in the legalities of lease language. Therefore, you should consult with an attorney regarding any lease.

  Work with an Attorney

  Before you commit to a lease — whether it is new, renewed or renegotiated — you should always work with an attorney. He or she can identify the high and low liability aspects of the lease and help make sure that you:

  • Get the best terms in legal protections
  • Limit your risks from a casualty and insurance standpoint
  • Understand the boilerplate language often included as standard in leases (such as waiving the right to a jury trial)
  • Know what all your obligations are according to the lease and agree with those terms

  In lease negotiations, an attorney can ensure that a lease includes ideal language to protect your interests. This adds a level of refinement and enforceability that only a legal expert can provide.

  Unlike a broker or other layperson, an attorney has the expertise to guide you through negotiations and manage complex lease language such as casualty and force majeure clauses. Just as you should always consult an attorney before signing a new contract, it is also important to have an attorney review the documents for lease renewals and renegotiations. Additionally, there may be times when it is appropriate to use an attorney to revisit previously negotiated boilerplate language.

  For instance, when you work with the same landlord for a long period of time or a multiple-lease portfolio, you tend to negotiate some standard language and then update the lease as needed in areas such as:

  • Business terms
  • Location-specific charges
  • Insurance language

  Ideally, you can work with the same attorney who was involved in negotiating the original lease, who can compare the documents and redline any changes or additions. At the very least, a new attorney can review the lease to make sure your interests are protected and there are no red flags.

  —

  Get a head start on your negotiation power with a powerful lease accounting and management tool. More than 1500 companies have used Visual Lease as their system of record for all leased real estate and equipment assets. Through proper lease management within one easy-to-use tool, you can simplify and automate lease information that you can leverage for more successful lease negotiations.

  About Visual Lease:

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage more than 1 million real estate, equipment and other leased asset records globally. For more information, visit visuallease.com.

  The post A Complete Guide to Commercial Lease Negotiations first appeared on Visual Lease.]]> https://visuallease.com/a-breakdown-of-gasb-96-6-things-you-need-to-know/ Tue, 20 Feb 2024 13:00:03 +0000 https://visuallease.com/?p=9081 We’re diving into the intricacies of GASB 96, a significant standard that government entities need to adopt, especially following the implementation of GASB 87. The Essence of GASB 96 GASB...
  The post A Breakdown of GASB 96: 6 Things You Need to Know first appeared on Visual Lease.]]> We’re diving into the intricacies of GASB 96, a significant standard that government entities need to adopt, especially following the implementation of GASB 87.

  1. The Essence of GASB 96

     GASB 96 deals with subscription-based information technology arrangements (SBITA), a new area of focus for government entities. This standard requires these entities to identify SaaS agreements and include them on their balance sheets for the first time, ensuring consistent treatment for state and local governments.

  2. Preparation and Comparison with GASB 87

     If your organization has already tackled GASB 87, you’re in an excellent position to handle GASB 96. The process and methodology are similar, aiming to bring uniformity in reporting. GASB 96, like its predecessor, necessitates identifying and consolidating relevant agreements into the balance sheet, creating both an asset and a liability.

  3. Timing and Challenges

     The GASB 96 regulation became effective as of June 15, 2022. Some entities were still grappling with GASB 87, hence the staggered approach to adopting GASB 96. The primary challenge lies in the capacity and bandwidth to implement these standards efficiently.

  4. Roles of IT and Accounting Departments

     The IT department and the accounting team play a pivotal role in this transition. GASB 96 will primarily impact IT, as it revolves around technology agreements. These departments must comb through contracts to classify and account for them appropriately under the new standard.

  5. Cost Considerations and Implementation

     Implementing GASB 96 involves identifying costs at different contract stages, such as preliminary, initial implementation, and operation stages. These need to be either capitalized or expensed, adding a layer of complexity to the process.

  6. Leveraging Technology

     Organizations implementing lease accounting technology for GASB 87 will find it beneficial to use similar technology for GASB 96. The similarity in concepts between the two standards means that adapting existing software solutions can streamline adoption.

  The transition to GASB 96 might be smoother than GASB 87 due to its specific focus on information technology agreements. However, the primary challenge remains the limited resources available to organizations to adopt these comprehensive standards concurrently.

  In conclusion, GASB 96 represents a significant shift in how subscription-based IT arrangements are reported and accounted for, mirroring the changes brought about by GASB 87 in lease accounting. As organizations adapt to these new standards, understanding and leveraging the right tools and strategies will be essential to successful implementation.

  The post A Breakdown of GASB 96: 6 Things You Need to Know first appeared on Visual Lease.]]> https://visuallease.com/2024-lease-accounting-trends-and-solutions/ Fri, 16 Feb 2024 13:00:05 +0000 https://visuallease.com/?p=9079 In our latest blog post, we delve into the findings of our Visual Lease Data Institute (VLDI) research that sheds light on the evolving terrain of lease accounting. About the...
  The post 2024 Lease Accounting Trends and Solutions first appeared on Visual Lease.]]> In our latest blog post, we delve into the findings of our Visual Lease Data Institute (VLDI) research that sheds light on the evolving terrain of lease accounting.

  About the Research: We surveyed senior finance and accounting professionals alongside financial management experts in government sectors.

  The research offers a revealing look at the challenges and solutions in the realm of lease accounting. As we unpack the intricacies of standards ASC 842 and GASB 87, we discover the significant impact of talent shortages, the struggle for knowledge retention, and the pivotal role of innovative software solutions in streamlining lease accounting processes.

  Challenges in Lease Accounting

  A critical finding is the impact of talent shortages and retention issues on adopting lease accounting standards.

  • Both sectors report their teams being stretched thin, with significant concerns over employee burnout.
  • Knowledge maintenance is another major hurdle, with a substantial percentage of both sectors finding it challenging to maintain compliance.

  Overcoming Lease Accounting Challenges with Technology

  Successful companies have overcome talent shortages by leveraging centralized systems for lease accounting and administration.

  • Third-party lease accounting software has been instrumental in streamlining tasks, improving accuracy, and ensuring regulation compliance.
  • Such software saves significant hours for private and public entities and provides essential customer support.

  The journey toward lease accounting compliance is fraught with challenges, but organizations can navigate these complexities effectively with the right tools and support. Visual Lease’s insights and solutions provide a roadmap for businesses to turn these challenges into opportunities for growth and strategic advantage.

  For more insights, visit the VLDI section of our website.

  About The Visual Lease Data Institute

  The Visual Lease Data Institute is a hub for key data trends insights on lease accounting, management, and optimization. It’s a resource designed to equip businesses with the necessary knowledge for lease accounting compliance and to use leases as strategic assets. The institute’s expertise is recognized widely, with mentions in prominent publications like The Wall Street Journal and Forbes.

  The post 2024 Lease Accounting Trends and Solutions first appeared on Visual Lease.]]> https://visuallease.com/tax-lessons-from-the-covid-19-pandemic/ Thu, 15 Feb 2024 13:00:05 +0000 https://visuallease.com/?p=9077 We’re delving into the complex world of lease accounting and its tax implications, particularly in the wake of the COVID-19 pandemic. We’ll share valuable insights into how businesses, especially retailers,...
  The post Tax Lessons from the COVID-19 Pandemic first appeared on Visual Lease.]]> We’re delving into the complex world of lease accounting and its tax implications, particularly in the wake of the COVID-19 pandemic. We’ll share valuable insights into how businesses, especially retailers, navigated the challenges posed by the pandemic using their lease agreements.

  During the pandemic, many businesses had to engage with landlords for financial concessions without fully considering these negotiations’ tax and cash implications. This lack of understanding led to unexpected tax consequences.

  Key Lessons for Retailers

  Retailers learned crucial lessons about leveraging their lease agreements during the early days of COVID-19. Educating clients on the tax implications of their lease decisions was vital.

  • One significant aspect was understanding the principles of code section 467, which ensures the matching of income and expenses in leasing transactions.
  • Without this knowledge, businesses risked incurring tax liabilities without the corresponding cash flow.

  E-Commerce Pivot and Tax Consequences

  While some retailers successfully pivoted to e-commerce, many were unprepared for this shift, leading to significant financial strains. Additionally, landlords forgoing rent presented another set of challenges, as the deferred payments still triggered tax liabilities under certain conditions. Businesses had to navigate these complexities without fully understanding the tax implications.

  Mitigating Negative Impacts with Better Understanding

  A firmer grasp of lease accounting and tax ramifications could have helped businesses mitigate the adverse effects of the pandemic. Structuring leases differently, for instance, could align cash flow with income recognition, providing much-needed relief.

  Broader Industry Implications

  These issues weren’t limited to retailers; other industries faced similar challenges. For example, manufacturers owning property had to consider sale and leaseback arrangements to survive, which required careful tax planning to avoid unintended consequences.

  The Role of Tax Professionals in Business Decisions

  Businesses need to involve tax professionals in their decision-making processes. While tax considerations shouldn’t drive business decisions, they are crucial in structuring transactions efficiently to avoid adverse tax implications.

  The pandemic underscored the importance of understanding the intersection of lease accounting and tax implications. Businesses that navigated this complex landscape effectively were able to turn challenges into opportunities, demonstrating the critical role of informed decision-making and expert guidance in the ever-evolving business environment.

  The post Tax Lessons from the COVID-19 Pandemic first appeared on Visual Lease.]]> https://visuallease.com/6-best-practices-for-asc-842/ Wed, 14 Feb 2024 13:00:23 +0000 https://visuallease.com/?p=9076 Adopting the ASC 842 lease accounting standard has been one of the most impactful changes in accounting practices, particularly for private companies gearing up for compliance. Drawing from the experience...
  The post 6 Best Practices for ASC 842 first appeared on Visual Lease.]]> Adopting the ASC 842 lease accounting standard has been one of the most impactful changes in accounting practices, particularly for private companies gearing up for compliance. Drawing from the experience of public companies that have already transitioned, here are some key insights and best practices:

  1. ASC 842 Is a Major Shift

     Auditing costs have been on the rise, driven by factors such as inflation, the impact of COVID-19, and company restructuring activities. According to a Gartner survey, a significant 62% of companies expect an increase in their audit fees. This upward trend in costs is directly linked to lease accounting.

  2. Preparation Beyond Technology

     Compliance with ASC 842 involves more than just implementing technology. It’s about thoroughly understanding and managing lease contracts, and ensuring cross-functional team involvement, particularly from finance personnel.

  3. Challenge of Lease Management

     Many companies struggle with lease management due to a lack of a centralized system or owner. This can lead to challenges in accurately accounting for leases.

  4. Day 1 Compliance and Beyond

     Achieving compliance starts by bringing all leases onto the balance sheet as a right of use asset and related liability. However, it also involves tracking and accounting for every lease change throughout the reporting period.

  5. Risks of Inaccuracy

     Without the proper tools and processes, there is a risk of inaccuracies in journal entries and disclosures, especially for companies with a large number of leases.

  6. The Burden of Volume

     The volume of leases can significantly complicate compliance. For instance, companies need to book an opening journal entry for all active leases at the start of the year, which can be a daunting task for those with numerous leases.

  In conclusion, transitioning to ASC 842 requires a comprehensive approach that goes beyond just adopting new software. It’s crucial for companies to act promptly, ensure thorough preparation, and involve cross-functional teams to navigate this change successfully.

  The post 6 Best Practices for ASC 842 first appeared on Visual Lease.]]> https://visuallease.com/the-importance-of-lease-accounting-automation/ Tue, 13 Feb 2024 13:00:08 +0000 https://visuallease.com/?p=9074 In today’s fast-paced business environment, lease accounting has become an increasingly complex task for organizations. Manual processes and outdated tools like Excel not only pose a high risk of errors...
  The post The Importance of Lease Accounting Automation first appeared on Visual Lease.]]> In today’s fast-paced business environment, lease accounting has become an increasingly complex task for organizations. Manual processes and outdated tools like Excel not only pose a high risk of errors but also result in rising audit fees. To address these challenges, companies are turning to lease accounting automation. In this blog post, we will explore the main reasons why lease accounting automation is crucial for businesses.

  Rising Audit Fees

  Auditing costs have been on the rise, driven by factors such as inflation, the impact of COVID-19, and company restructuring activities. According to a Gartner survey, a significant 62% of companies expect an increase in their audit fees. This upward trend in costs is directly linked to lease accounting.

  Connection to Lease Accounting

  Achieving and maintaining compliance with lease accounting standards, such as ASC 842, GASB 87, and IFRS 16, is a complex task. However, automation can significantly reduce the costs associated with lease accounting. By leveraging the power of automation, organizations can streamline their lease accounting processes and ensure compliance, leading to potential cost savings.

  Impact on Audit Fees

  Companies that automate at least 25% of their internal controls reported paying nearly 30% less in audit fees. This substantial reduction in costs can offset the annual expenses of lease accounting software subscriptions. By investing in the right lease accounting technology, businesses can realize significant financial benefits.

  Risks of Manual Processes

  Lease accounting involves intricate calculations, making it highly susceptible to human error. Relying on manual processes, especially tools like Excel, increases the risk of inaccuracies in lease accounting. To mitigate this risk, organizations need to embrace automation.

  Consequences of Errors

  Errors in lease reporting can have serious repercussions for businesses. A survey conducted among senior finance and accounting professionals revealed widespread concern about the potential for misreporting lease information. The main worries include increased audit fees and fines, potential damage to the company’s reputation, risk of legal action, and harm to personal professional reputation.

  Benefits of Automation

  Implementing the right lease accounting technology can mitigate risks, enhance operational efficiency, and lead to significant savings on audit costs. By automating lease accounting processes, organizations can ensure compliance with accounting standards, streamline their operations, and eliminate the risk of errors.

  In conclusion, lease accounting automation is no longer just a luxury but a necessity for businesses in today’s complex financial landscape. By embracing automation, companies can reduce audit fees, mitigate risks, and ensure accurate and streamlined lease accounting. To stay ahead of the competition and navigate the challenges of lease accounting, organizations must invest in the right lease accounting technology.

  The post The Importance of Lease Accounting Automation first appeared on Visual Lease.]]> https://visuallease.com/4-steps-to-lease-accounting-compliance/ Mon, 12 Feb 2024 16:20:30 +0000 https://visuallease.com/?p=9072 The management letter from auditors, typically received by CFOs after the annual audit, highlights key financial findings and suggests improvements for internal controls. It also informs about new accounting standards...
  The post 4 Steps to Lease Accounting Compliance first appeared on Visual Lease.]]> The management letter from auditors, typically received by CFOs after the annual audit, highlights key financial findings and suggests improvements for internal controls. It also informs about new accounting standards that need adoption.

  Steps for Lease Accounting Compliance

  To ensure compliance with lease accounting standards, companies should follow these steps:

  In lease accounting specifically, the completeness assertion claims that all leases have been captured and properly capitalized on the balance sheet.

  1. 1. Familiarize with Deadlines

        Understand and allocate sufficient time for gathering lease documents and processing necessary data.

  Create a Plan and Identify Stakeholders

  Recognize major milestones and assign key players or teams to each initiative, understanding their roles and the importance of deadlines.

  Centralize Relevant Documents

  Use a centralized system for easy access, analysis, and updates of lease information. Invest in efficient technology for this purpose.

  Develop Business Requirements

  Before selecting technology or partners, consult with internal stakeholders for their input. This will aid in smooth adoption and ongoing compliance.

  Compliance with the latest lease accounting standards, (ASC 842, GASB 87, and IFRS 16), is not just a regulatory requirement but a strategic opportunity. The management letter serves as a vital roadmap in this process, pointing out critical areas that need attention. By understanding the importance of deadlines, creating a well-thought-out plan, centralizing documentation, and involving key stakeholders in the decision-making process, companies can turn what seems like a daunting task into a manageable and beneficial undertaking.

  Takeaway: Remember, compliance is not just about meeting standards; it’s about enhancing the overall financial health and transparency of your organization. By adopting a proactive approach and leveraging technology effectively, businesses can not only meet the necessary compliance requirements but also gain insights that drive better lease management and financial decisions. In the evolving landscape of financial reporting and management, staying ahead in compliance is not just good practice—it’s a competitive advantage.

  The post 4 Steps to Lease Accounting Compliance first appeared on Visual Lease.]]> https://visuallease.com/accounting-today-names-vl-esg-steward-a-top-new-product-in-2024/ Thu, 08 Feb 2024 14:31:57 +0000 https://visuallease.com/?p=9067 Carbon accounting and sustainability management solution recognized for empowering Enterprises with the data and visibility needed to progress toward their ESG goals Woodbridge, N.J. –February 8, 2024 – Visual Lease...
  The post Accounting Today Names VL ESG Steward™ a Top New Product in 2024 first appeared on Visual Lease.]]>

  Carbon accounting and sustainability management solution recognized for empowering Enterprises with the data and visibility needed to progress toward their ESG goals

  Woodbridge, N.J. –February 8, 2024 – Visual Lease (VL), the #1 lease optimization software provider, today announced that VL ESG Steward has been named a Top New Product in 2024 by Accounting Today.

  VL ESG Steward is the first carbon accounting and sustainability management solution for enterprise real estate and equipment portfolios. Built on decades of lease management best practices, it serves as a centralized system of record for contracts, workflows, financials, and climate risk, providing a complete operational, financial, and environmental view of the portfolio and real-time, asset-level data for sustainability calculations.

  “Nearly 70% of senior accounting and finance executives report that their organizations are not fully prepared in terms of their ability to track and measure the environmental impact of leased and owned asset portfolios to comply with the new and emerging environmental reporting requirements,” said Robert Michlewicz, CEO of Visual Lease. “After confirming this need mirrored with our customers and partners, we expanded our platform to include VL ESG Steward, which will not only aid in reporting efforts, but also, illuminate areas of opportunity to help companies create a more sustainable future.”

  VL ESG Steward automatically tracks portfolio changes and calculates asset-level emissions in accordance with the greenhouse gas protocol. It also tracks energy, water, waste, and biodiversity impact in compliance with global regulations, and offers configurable controls to ensure accurate data and complete documentation for attestation.

  “It is an honor to have been included in Accounting Today’s list of Top New Products for 2024 alongside other industry leaders,” added Michlewicz. “This recognition reinforces our team’s commitment to helping organizations across the globe leverage their portfolio for strategic financial and operational outcomes.”

  In 2023, VL ESG Steward was recognized as a finalist for a Software as a Service (SaaS) award within the category of Best SaaS Product for CSR, Sustainability and ESG, and also named a Sustainability Product of the Year by the Business Intelligence Group.

  To learn more about VL ESG Steward, please visit this link.

  About Visual Lease

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage more than 1 million real estate, equipment and other leased asset records globally. For more information, visit visuallease.com.

  Media Contact:

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Accounting Today Names VL ESG Steward™ a Top New Product in 2024 first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-solidifies-enterprise-market-leadership-position-in-2023/ Thu, 18 Jan 2024 15:24:20 +0000 https://visuallease.com/?p=9018 Lease optimization software provider redefines excellence with a single system of record for lease accounting, management and sustainability tracking Woodbridge, N.J. – January 18, 2024 – Visual Lease (VL), the...
  The post Visual Lease Solidifies Enterprise Market Leadership Position in 2023 first appeared on Visual Lease.]]>

  Lease optimization software provider redefines excellence with a single system of record
  for lease accounting, management and sustainability tracking

  Woodbridge, N.J. – January 18, 2024 – Visual Lease (VL), the #1 lease optimization software provider, today announced its results from 2023, reporting sustained double-digit annual recurring revenue and customer percentage growth, year-over-year.

  “Visual Lease’s accomplishments in 2023 serve as a launchpad for our journey ahead,” said Robert Michlewicz, VL’s Chief Executive Officer. “Drawing upon our 25+ years of deep domain expertise and inspired by the strategic input we continue to seek and incorporate from our customers and partners; we’ve made focused investments in our platform and support offerings to increase the value to our users and partners. We also continue investing in our people to foster cross-departmental collaboration and support expanded growth and development opportunities for our team. As a result, VL has been consistently recognized for its unique ability to help enterprises leverage their lease portfolio to drive more strategic financial and operational outcomes.”

  In 2023, Visual Lease:

  Solutions and Services

  • Launched its newest offering, VL ESG Steward, the first carbon accounting and sustainability management solution for enterprise real estate and equipment portfolios. Since its launch, VL has released several new capabilities, including managed emissions factors for International Energy Grids, intelligent imports to establish organizational boundaries and upload sustainability entries at scale, detailed reports and exports, advanced user permissions and flexible configurations.
  • Introduced product enhancements, including updating the user interface of its lease accounting solution, delivering a new Currency API to automatically update and synchronize foreign exchange rates, enhancing its GASB Roll Forward Report for lessees to gain visibility into asset and liability activity that occurred in the reporting period and elevating its Accumulated Amortization feature.
  • Expanded its network of consulting, reporting, technology and data partners, providing additional financial and operational benefits to mutual customers by strengthening its existing relationships with Cresa Lease Administration, Scribcor and others. VL also deepened its relationship with managed services partner RSM US LLP.
  • Hosted its second annual Customer Advisory Board (CAB) Summit in San Antonio, TX, a multi-day event where select customers and partners gathered to discuss industry trends, as well as review and provide feedback on VL’s roadmap.
  • Announced the winners of its annual Customer Excellence Awards, recognizing American Axle Manufacturing, Compass and Quanta Services for capitalizing on VL’s unique capabilities to streamline critical workflows, promote cross-departmental collaboration and ensure data accuracy. VL also recognized RSM US LLP as its Partner of the Year for the work it is doing to help organizations implement processes and technologies to recognize risks and opportunities across their lease portfolios.
  • Established Technical Account Managers (TAMs) to address enterprise clients’ evolving business needs, extending value to direct customers and supporting the company’s growing global partner network.

  Industry Recognition

  • Named a Leader in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Lease Accounting and Administration Applications 2023 Vendor Assessment (doc # US48562222, August 2023), the first analyst report to provide a comprehensive evaluation of the combined lease accounting and lease administration capabilities of more than a dozen solution providers.
  • Received industry recognitions for the VL ESG Steward platform extension, recognized as a finalist for a Software as a Service (SaaS) award within the category of Best SaaS Product for CSR, Sustainability and ESG, and also named a Sustainability Product of the Year by the Business Intelligence Group.
  • Recognized as a Leader in Enterprise Lease Administration and Enterprise Lease Accounting, as well as an overall Leader in the Lease Accounting and Lease Administration categories by G2, quarter-over-quarter.
  • Unveiled new research under The Visual Lease Data Institute (VLDI), including The 2023 Commercial Real Estate and Leasing Trend report and The 2024 Office of Finance Outlook: Environmental Impact Reporting. Findings from the research have been featured in The Wall Street Journal, Accounting Today, Yahoo! Finance, Benzinga, Globe St., CPA Practice Advisor and more.

  Leadership

  • Appointed Amie Durr as VL’s first Chief Product Officer, responsible for overseeing the organization’s product and engineering teams to ensure continued product innovation with even greater speed to market. Durr’s team lead the development of VL ESG Steward.
  • Announced Kathryn Eskandarian as VL’s first Chief Financial Officer, having previously served as the organization’s SVP of Finance & Accounting. Eskandarian is responsible for VL’s financial operations, including corporate financial planning, audit and tax functions, as well as its IT, legal and human resources departments.
  • Welcomed Gene Cook as Vice President of Global Partners, responsible for helping the company expand the value it provides to its growing network of Global Partners across leading accounting firms, professional services organizations, commercial real estate firms and solution providers.

  Culture

  • Named a Best Place to Work in New Jersey by NJBIZ for the fourth consecutive year, recognized for its culture, strong leadership, high levels of employee satisfaction and the many growth and development opportunities provided to the team.
  • Held its Summer Innovation Days, gathering team members from across the organization to come together and share creative ideas for developing new platform capabilities to support customers’ needs and align with its corporate vision.
  • Hosted its inaugural VL Week, providing an opportunity for employees to learn, connect and apply key concepts that are critical to supporting its customers, collaborating with its global partners and achieving shared corporate goals.

  To keep up with the latest findings from The Visual Lease Data Institute and additional announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage more than 1 million real estate, equipment and other leased asset records globally. For more information, visit visuallease.com.

  Media Contact:

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Visual Lease Solidifies Enterprise Market Leadership Position in 2023 first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-recognized-as-leading-lease-accounting-and-lease-management-platform-for-enterprise-organizations-in-g2s-2024-winter-reports/ Thu, 21 Dec 2023 13:00:48 +0000 https://visuallease.com/?p=8981 Solution provider is recognized for empowering companies to leverage their lease portfolios for strategic financial and operational outcomes Woodbridge, N.J. – Dec. 21, 2023 – Visual Lease (VL), the #1...
  The post Visual Lease Recognized as Leading Lease Accounting and Lease Management Platform for Enterprise Organizations in G2’s 2024 Winter Reports first appeared on Visual Lease.]]>

  Solution provider is recognized for empowering companies to leverage their lease portfolios for strategic financial and operational outcomes

  Woodbridge, N.J. – Dec. 21, 2023 – Visual Lease (VL), the #1 lease optimization software provider, today announced it has been featured in 55 of G2’s 2024 Winter reports and received 17 badges for the winter season. VL has been named a leader in the Enterprise Grid® Report for Lease Accounting, Enterprise Americas Regional Grid® Report for Lease Accounting, Enterprise Relationship Index for Lease Accounting and Enterprise Relationship Index for Lease Administration.

  “The advancement – and value – of technology hinges on customer feedback,” said Robert Michlewicz, Chief Executive Officer at Visual Lease. “For 25+ years, we have expanded VL’s platform based on the evolving needs and interests of our customers to ensure that they continue to receive maximum value from our solutions. Inclusion in G2’s reports affirms that VL consistently provides organizations that have complex lease and asset portfolios with the ability to accurately manage, track and report on their leases and related records. This capability not only fuels their compliance efforts, but also provides them with the strategic advantage of being able to use their portfolio data to make better-informed operational decisions and prepare for emerging business needs, such as environmental reporting.”

  Visual Lease earned this status as a leading lease accounting and lease management platform based on customer feedback, such as:

  • Robust product features to support ongoing compliance and accurate reporting.
    “Visual Lease is built for both lease administration and lease accounting, which is especially great for teams that have a lease administration need that do not want to duplicate the work for ASC 842 management. Visual Lease is also great with reporting with several robust reports (including disclosure reports for financial statements), and awesome with bulk uploads of data if you have a number of leases that takes up a big amount of time fixing from month to month.”
  • Unparalleled lease management capabilities and customer support.
    “VL is a very intuitive tool, which makes training a global user base of hundreds of users easier. Integrating new plants post-acquisition is efficient with the various upload templates that allow you to create many new leases at once. The customer support team responds in a timely manner and the senior leadership of the company is focused on continued enhancements with the input of their customer base.”
  • Ability to facilitate audit-readiness.
    “Visual Lease provides us with the reports that we need for our annual audit. The reports are concise, clear and contain everything needed for footnote preparation.”
  • Full lease lifecycle support.
    “Visual Lease provides a clean, organized platform to both house my lease documents but also, stay organized with rent schedules, deferred rent, lease renewals and essentially everything lease related. The also offer easy-to-navigate tools via their cloud website that I can access anywhere.”
  • Commitment to continuous improvement.
    “Visual Lease has been quick to make improvements and updates after being provided feedback. I appreciate that they are very adaptable to changes and their customer support is very quick to respond. They’re very receptive to constructive feedback.”

  Learn more about what real users have to say (or leave your own review of Visual Lease) on G2’s VL review page.

  About G2

  G2 is the world’s largest and most trusted software marketplace. More than 90 million people annually — including employees at all Fortune 500 companies — use G2 to make smarter software decisions based on authentic peer reviews. Thousands of software and services companies of all sizes partner with G2 to build their reputation and grow their business — including Salesforce, HubSpot, Zoom, and Adobe. To learn more about where you go for software, visit www.g2.com and follow us on LinkedIn.

  About Visual Lease

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage more than 1 million real estate, equipment and other leased asset records globally. For more information, visit visuallease.com.

  Media Contact:

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Visual Lease Recognized as Leading Lease Accounting and Lease Management Platform for Enterprise Organizations in G2’s 2024 Winter Reports first appeared on Visual Lease.]]> https://visuallease.com/4-reasons-to-avoid-excel-for-lease-accounting/ Thu, 07 Dec 2023 16:00:58 +0000 https://visuallease.com/?p=7226 Is Excel good for lease accounting? 1. Lease terms constantly change, and it’s hard to keep up 2. Lease accounting calculations are complex and time consuming 3. Excel spreadsheets are...
  The post 4 Reasons to Stop Using Excel Spreadsheets for Lease Accounting first appeared on Visual Lease.]]>
  • Is Excel good for lease accounting?
  • 1. Lease terms constantly change, and it’s hard to keep up
  • 2. Lease accounting calculations are complex and time consuming
  • 3. Excel spreadsheets are prone to human error
  • 4. Excel lacks historical data required for audits
  • Benefits of lease accounting software
  • Ensuring ASC 842 compliance
  • Get Started!

  Your business already uses Excel for many accounting calculations, including for ASC 840 lease accounting, so it’s understandable that you may want to consider continuing to use it as an option for lease accounting under ASC 842. And although it’s inexpensive to use and there’s comfort in using it, it may only get you so far in ensuring accurate lease accounting reports and calculations.

  Is Excel good for lease accounting?

  The reality is Excel will create challenges supporting large lease portfolios and the complex calculations that are required to comply with the new lease accounting standards. Ideally, the lease accounting solution you select should make it easy to view every lease – and address any changes made during the lease term, something that will be more difficult using Excel. Improperly tracking your leases and performing manual calculations using Excel puts you at risk of inaccurate data and reports.

  In this blog, we will discuss why Excel is not a sustainable choice to accomplish lease accounting compliance, and why lease accounting software is critical to ensure accurate, confident compliance.

  1. Lease terms constantly change, and it’s hard to keep up

  As leases change (expire, terminate, etc.), it’s virtually impossible to keep track of each change using Excel. One of the main reasons this is so difficult to do manually is due to the large volume of leases held by organizations. Businesses often have hundreds, even thousands of leases, each with their own unique terms that regularly need to be tracked to ensure accurate lease accounting reports.

  Unlike Excel, a fully integrated lease management and accounting technology solution is designed to centralize lease data in one location and, therefore, support ongoing lease maintenance. This enables you to view and maintain lease clauses and options under one single source of truth – without having to manually sift through data. Lease management software simplifies and streamlines the process of updating lease data, which ensures always accurate, reliable lease financials required for compliance.

  For example, technology like Visual Lease provides automated critical date alerts so you can always know when leases require action. Excel lacks these built-in tools, which therefore puts you at risk of missing important options within your leases.

  2. Lease accounting calculations are complex and time consuming

  The calculations required to generate journal entries and disclosure reports for ASC 842 must be accurate to achieve and sustain compliance. Automated lease accounting technology is the only way to confidently create reliable, accurate reports.

  Excel doesn’t have the capability to support the unique nuances required for lease accounting calculations. Utilizing Excel for lease accounting will likely take a lot of time and resources to produce calculations, and you may not be able to rely on those calculations, as there isn’t an efficient, sustainable way to validate accuracy. Even if only one element of your Excel formula is off base, it can negatively impact your calculated numbers – and you may not even realize the error before it’s too late. Additionally, Excel has a limit on the number of transactions that can be tracked and reported.

  Lease accounting technology automates these otherwise complex reports and calculations, which saves you significant time that would be spent manually producing them in Excel, and also ensures the calculations are trustworthy. In fact, lease accounting software like Visual Lease provides proven calculations that are backed by a SOC I Type II audit.

  3. Excel spreadsheets are prone to human error

  Lease accounting is too important to risk manual errors. Just one mistake could lead to a failed audit, which is why lease accounting automation is so critical.

  Using Excel to produce disclosure reports will typically raise red flags during your audit. Your lease data is already subject to a much higher degree of scrutiny by your auditors due to the new lease accounting standards, especially for initial adoption, so when it’s time for your audit, auditors appreciate a defined, reliable process that eliminates the room for human error within calculations.

  An auditor knows if you utilize a lease accounting solution that is backed by a SOC I Type II report, your financial reporting and calculations should be reliable, and they won’t need to spend as much time testing the detailed transactions as they would with manual spreadsheets.

  If you use Excel, auditors will most likely need to take a different approach to their auditing process, which can be time-consuming and costly. For instance, they may need to select a larger sample size of transactions to reliably test the details of your Excel calculations.

  It begs the question, are you really saving money (and time) by using Excel instead of proven lease accounting technology? A failed audit can lead to increased fees and fines, along with damage to your business’ reputation. Why put yourself in a position where this can easily happen with Excel when you don’t have to?

  4. Excel lacks historical data required for audits

  Imagine inputting lease data into an Excel spreadsheet and the next day there are numerous changes to the data – you don’t know who made the changes and when. As leases change throughout the year, there needs to be an effective, reliable way for departments to capture any lease modifications to their portfolio, so that their lease data stays up to date. Doing this in Excel requires constant manual intervention and upkeep and can lead to a lot of questions raised by auditors and other stakeholders across your organization.

  Providing transparent updates – with a complete audit trail of which update was made and when – will be incredibly important at the time of your financial audit. In Excel, there isn’t a reliable way to track who’s making changes and when the edits take place. This puts your business at risk of producing inaccurate, outdated information.

  Lease accounting software provides full audit trail functionality that enables you and your auditors to see who, what, where and when every change to your lease data has been made. Having the history of every change to your leases is necessary to create a reliable lease accounting process.

  Benefits of lease accounting software

  Excel is one of the most accessible tools in an accountant’s arsenal. However, it wasn’t built to handle the thoroughness and accuracy required for lease accounting. To achieve and maintain lease accounting compliance, you’ll need to invest in a solution that was designed to set your business up for success.
  Lease accounting isn’t just a one-and-done disclosure, it demands consistent upkeep of your entire lease portfolio. Lease accounting software is an integral part of conducting complex calculations with confidence, ensuring all your leases are up-to-date and achieving (and maintaining) lease accounting compliance.

  Ensuring ASC 842 compliance

  Lease accounting standards and constantly changing. This means spreadsheets need to be constantly reformatted to ensure you are remaining compliant with the latest regulation changes, requiring a robust software solution.

  When it comes to ensuring your leases are compliant, don’t default to a spreadsheet. Make the move to a third-party verified, built-for-compliance lease accounting software solution.

  Get Started!

  Want to ditch the spreadsheets and learn how Visual Lease’s lease accounting software can help you sustain compliance? Click here to see our solution in action.

  The post 4 Reasons to Stop Using Excel Spreadsheets for Lease Accounting first appeared on Visual Lease.]]> https://visuallease.com/why-you-should-retire-excel-in-lease-accounting/ Thu, 07 Dec 2023 13:50:31 +0000 https://visuallease.com/?p=7827 3 Reasons to Stop Relying on Excel Spreadsheets 1. Leases are constantly changing 2. Excel can lead to non-compliance with accounting standards 3. The Office of Finance has evolved 3...
  The post Should I Use Excel or Switch to Lease Accounting Software? first appeared on Visual Lease.]]>
  • 3 Reasons to Stop Relying on Excel Spreadsheets
  1. 1. Leases are constantly changing
  2. 2. Excel can lead to non-compliance with accounting standards
  3. 3. The Office of Finance has evolved
  • 3 Reasons to Switch to Lease Accounting Software
  1. 1. Centralize your lease data in one place
  2. 2. Be efficient & save time with lease management software
  3. 3. Reduce your risk and stay compliant
  • Switch to Visual Lease Accounting Software

  Does your business still use Excel for lease accounting? If so, you’re not alone — many other businesses do the same.

  But there’s a limit to what Excel can do for your organization’s lease portfolio. The reality is that leases are complex, dynamic documents that need a more comprehensive accounting option than Excel. Spreadsheets lack the ability to accurately and efficiently support large lease portfolios and the complex calculations required to comply with lease accounting standards.

  To stay compliant with accounting standards (ASC 842, IFRS 16, GASB 87) and avoid costly mistakes or fines, your business must move to a solution that is built to accommodate the dynamic nature of leases.

  Spreadsheets were never designed to handle processes as complicated as lease accounting. In fact, 100% of senior Real Estate executives believe it is impossible to sustain lease accounting compliance (e.g., ASC 842, IFRS 16, GASB 87) without proper lease administration practices in place.

  3 Reasons to Stop Relying on Excel Spreadsheets

  Here are three major reasons that businesses are unable to rely on Excel for sustained lease accounting compliance:

  1. Leases are constantly changing.

  Leases evolve over time — including expirations, terminations and renewals — making it almost impossible to manually keep track of every change within a spreadsheet. Without sufficient controls to track these ongoing changes, businesses are at risk of reporting on outdated lease data and missing important lease options. As organizations try to keep up with each changing lease, it won’t be long before accounting professionals leave Excel behind for good.

  2. Excel can lead to non-compliance with accounting standards.

  Lease accounting requires transparency in how businesses account for assets and liabilities. Auditors will check to ensure every lease is reliable and that your calculations are accurate. Just one mistake could lead to a failed audit, increased fees and fines, risk of legal action and more. There’s too much at risk to use Excel.

  3. The Office of Finance has evolved.

  For many organizations, the Office of Finance is now responsible for more strategic business initiatives and must accomplish more with less while navigating a weakening economy. Excel exacerbates this issue by requiring long hours of tedious, manual work that’s prone to human error.

  3 Reasons to Switch to Lease Accounting Software

  Lease accounting requires consistent upkeep of your entire lease portfolio. Investing in lease accounting software like Visual Lease helps ensure a seamless process and support ongoing compliance. Here’s why:

  1. Centralize your lease data in one place.

  Fully integrated lease management and accounting technology helps businesses closely maintain their lease data by organizing it in one location. As a result, teams can easily view lease clauses and options under a single source of truth without needing to manually sift through data. This, in turn, ensures accurate, reliable lease financials required for compliance.

  2. Be efficient & save time with lease management software

  As financial teams handle more responsibilities with increasingly limited resources, lease accounting software makes tracking leases easier and more efficient. In fact, according to Visual Lease’s 2022 Lease Market Analysis, private companies saved an average of 600 hours by using third-party lease accounting software.

  3. Reduce your risk and stay compliant.

  Lease accounting tools circumvent the human errors that often occur in Excel. In particular, Visual Lease automates otherwise complex reports and calculations and explains its calculations in every screen, leading to a more confident, reliable financial report. Additionally, when your business uses lease accounting software, auditors will have quick and easy access to your financial reporting and calculations.

  Excel wasn’t designed to handle the in-depth, complex work required for lease accounting. And since leases are often a company’s second-largest expense, relying on Excel isn’t worth the risk of costly audits and fines. Instead, investing in a lease accounting software solution like Visual Lease ensures your business can stay compliant, avoid costly fees, identify cost-saving opportunities and leverage leases as a more strategic business asset.

  Switch to Visual Lease Accounting Software

  Visual Lease makes the transition from Excel to lease accounting software easy, offering an intuitive platform with automated data input, standardized reporting, and compliance tracking. Our proven methodology will make the switch from spreadsheets to software quickly and efficiently.

  Request a demo today and make the switch!

  The post Should I Use Excel or Switch to Lease Accounting Software? first appeared on Visual Lease.]]> https://visuallease.com/what-does-completeness-assertion-mean-in-lease-accounting/ Tue, 05 Dec 2023 13:00:49 +0000 https://visuallease.com/?p=7709 What is completeness assertion in lease accounting? Auditing completeness under ASC 842 What is audited under completeness assertion? How to ensure accurate completeness assertions Getting started with lease compliance Inaccurate...
  The post What Does Completeness Assertion Mean in Lease Accounting? first appeared on Visual Lease.]]>
  • What is completeness assertion in lease accounting?
  • Auditing completeness under ASC 842
  • What is audited under completeness assertion?
  • How to ensure accurate completeness assertions
  • Getting started with lease compliance

  Inaccurate lease accounting can lead to a host of problems for an organization, such as wasting time and resources and a failed audit. In the final stages of the auditing process, accounting professionals will test the assertions in a company’s financial statements, including the completeness assertion. Let’s look at what completeness assertion is in lease accounting and how to ensure its accuracy when preparing for audits.

  What is completeness assertion in lease accounting?

  On a financial statement, completeness assertion affirms that the statement is thorough, includes and details all required items for a particular accounting period and that the organization’s entire inventory is included in the total inventory figure.

  In lease accounting specifically, the completeness assertion claims that all leases have been captured and properly capitalized on the balance sheet.

   

  Auditing completeness under ASC 842

  Completeness is a significant audit area for leases. With the ASC 842 standard, organizations must recognize assets and liabilities on the balance sheet for both operating and finance leases. It’s now crucial for companies—whether private or public—to have an accurate and thorough accounting of all leased assets to ensure completeness.

  What is audited under completeness assertion?

  When a business is audited under ASC 842, an auditor will assess completeness across several areas, including:

  • Lease calculations: Auditors make sure initial balances are calculated correctly and that lease expenses and ROU asset amortization are accurately recorded. They’ll also check to make sure all lease transactions are recorded within the stated period.
  • Quantitative and qualitative footnote disclosures: Auditors check footnote disclosures to ensure all information—including assets, liabilities, lease expenses, cash flow and more—are properly recorded. They also look at the qualitative information that explains what the numbers mean for the company.
  • Embedded leases: It’s easy to overlook or improperly record embedded leases, which are leases within a larger contract. Auditors make sure all embedded leases are clearly and correctly recognized in your company’s financial statements.

   

  How to ensure accurate completeness assertions

  With the new accounting standards, each lease under a business now directly impacts the balance sheet. Not having an accurate, complete representation of all leases could result in an understatement of assets and liabilities.

  As a result, businesses must identify all arrangements that meet the definition of a lease per ASC 842 to ensure completeness. Ignoring this step can lead to a waste of time, money and professional resources, especially during audits, along with costly fines or penalties if financial statements are misrepresenting leased assets.

  Identifying a complete population of leases can be a large undertaking, depending on how centralized a business’ operations are. Typically, this process involves inquiries with department heads along with a detailed review of accounts payable. Because of this, it’s important to maintain seamless and ongoing communication across departments.

  Getting started with lease compliance

  Companies that are in the process of adopting ASC 842 may also find they need new systems or protocols to preserve completeness on an ongoing basis. The right lease administration and accounting software can help save time and resources by enabling teams to regularly capture all details of leased assets as well as efficiently compile all completeness evidence before audits.

  Interested in lease accounting?

  Take the next step and schedule a demo with Visual Lease to ease your lease accounting needs today!

  The post What Does Completeness Assertion Mean in Lease Accounting? first appeared on Visual Lease.]]> https://visuallease.com/asc-842-lease-accounting-excel-templates/ Wed, 01 Nov 2023 13:00:32 +0000 https://visuallease.com/?p=8849 Using ASC 842 Excel Templates How to Create Customized ASC 842 Excel Templates Best Practices for Data Entry and Formula Setup Best Practices for Document Organization Common Challenges with ASC...
  The post ASC 842 Lease Accounting Excel Templates first appeared on Visual Lease.]]>
  • Using ASC 842 Excel Templates
  • How to Create Customized ASC 842 Excel Templates
  • Best Practices for Data Entry and Formula Setup
  • Best Practices for Document Organization
  • Common Challenges with ASC 842 Excel Templates
  • ASC 842 Excel Templates vs Lease Accounting Software
  • Leaving Cumbersome Spreadsheets for a Purpose-Built Platform

  The ASC 842 lease accounting standard represents a significant shift in how organizations report their leases. Before ASC 842, operating leases were not included on the balance sheet, which neglected to provide a full picture of cash flows from leases. This meant companies and investors were unable to identify how much debt was carried within a business’ lease obligations.

  The new lease accounting standard requires organizations to include operating leases and financial leases on the balance sheet, which increases visibility into leasing costs and arrangements. This ensures an accurate depiction of company financials. Compliance with ASC 842 is essential for transparency, accuracy, and financial accountability.

  The calculations that are involved in staying compliant are extremely susceptible to error – particularly if done without automation.  However, many individuals and organizations initially turn to Excel templates for managing their lease accounting needs. In this blog post, we will explore both Excel templates and technology options for ASC 842 compliance.

  Using ASC 842 Excel Templates

  Excel templates can seem like a convenient and cost-effective solution for ASC 842 lease accounting. They offer flexibility in customization and can be tailored to an organization’s specific needs. However, setting up and managing Excel templates for ASC 842 compliance comes with its own set of challenges.

  How to Create Customized ASC 842 Excel Templates

  Setting up Excel templates for ASC 842 can be a time-consuming process. You’ll need to design templates that accurately capture all lease data, including lease terms, payments, and commitments. Creating these templates from scratch can be complex, and errors in template design can lead to inaccuracies down the line. That said, here are some tips to get you started:

  Step 1: Define Your Lease Data Categories

  Before you start building the template, it’s crucial to identify the data categories you need to track to comply with ASC 842. Common categories include:

  • Lease Details: Lease ID, lease term, commencement date, termination date, etc.
  • Payment Information: Monthly/quarterly/yearly lease payments, initial direct costs, etc.
  • Lease Modifications: Any changes or modifications to the lease terms.
  • Discount Rate: The rate used to calculate the present value of lease payments.
  • Lease Liability and Right-of-Use (ROU) Asset: Calculations of these values over time.
  • Lease Classification: Operating or finance lease classification criteria.
  • Lease Documents: Attachments for lease agreements, amendments, disclosures, etc.

  Step 2: Create a New Excel Spreadsheet

  Open Excel and create a new blank spreadsheet. You can start with a clean sheet or use Excel’s pre-designed templates as a starting point.

  Step 3: Set Up Columns and Headers

  In your spreadsheet, create columns for each data category identified in Step 1. Label each column with appropriate headers, such as “Lease ID,” “Commencement Date,” “Lease Term (Years),” “Monthly Payments,” and so on. You can also add headers for any additional information, such as lessor details, lease modifications, and classification criteria.

  Step 4: Format and Customize the Template

  Format the columns to ensure that data is displayed correctly. You may want to adjust column widths, apply cell formatting (e.g., date format, currency format), and add borders for clarity.

  Customize the template further by adding dropdown lists, data validation, or conditional formatting to enforce data consistency and accuracy. For example, you can create dropdown lists for lease classification options or lease modification types.

  Step 5: Add Formulas

  Incorporate Excel formulas to calculate values automatically. For ASC 842 compliance, you’ll need to calculate the present value of lease payments, lease liability, and ROU asset. These calculations involve using the discount rate and the lease payment schedule.

  For instance, you can use the NPV (Net Present Value) function to calculate the present value of lease payments over time.

  Step 6: Set Up Tabs and Document Management

  Create separate tabs or sheets within the Excel file for lease documents and attachments. Each document should be appropriately labeled and organized for easy reference.

  Step 7: Testing and Validation

  Before using the template for actual lease accounting, thoroughly test it with sample data to ensure that calculations and formulas work correctly. Validate the template’s accuracy against known lease scenarios.

  Step 8: User Training

  Provide training to the relevant personnel on how to use the template effectively and input data accurately.

  Remember that while this basic Excel template can help you get started with ASC 842 lease accounting, as your organization’s lease portfolio grows, and complexity increases, you may want to consider transitioning to specialized lease accounting software to streamline the process and ensure compliance more efficiently. Such software offers automation, audit trails, and advanced reporting capabilities, reducing the risk of errors and enhancing accuracy.

  Best Practices for Data Entry and Formula Setup

  When using Excel for ASC 842 lease accounting, implementing best practices for data entry and formula setup is crucial to ensure accuracy, compliance, and efficient lease management. Here are some best practices to consider:

  • Consistent Data Input: Ensure that lease data is entered consistently and uniformly throughout the spreadsheet. Use standardized naming conventions and units (e.g., dollars, square feet, months).
  • Data Validation: Implement data validation rules to prevent incorrect or inconsistent data entry. Use dropdown lists, date validation, and other data validation features to guide users.
  • Data Review: Periodically review and audit the data entered into the spreadsheet for accuracy and completeness. Regularly check for errors, missing information, or discrepancies.
  • User Training: Provide training to the individuals responsible for data entry. Ensure they understand the ASC 842 requirements and how to accurately input lease data into the spreadsheet.
  • Documentation: Document data sources, assumptions, and any changes made to lease agreements or data. This documentation is crucial for audit purposes and maintaining a clear audit trail.

  Formula Setup Best Practices:

  Excel templates require meticulous data entry to ensure accuracy. Formula setup can also be prone to human error. Mistakes in data entry or formulae can lead to incorrect calculations, potentially resulting in non-compliance with ASC 842. Keep these tips in mind:

  • Consistent Formulas: Use consistent formulas throughout the spreadsheet to calculate values like the present value of lease payments, lease liability, and ROU asset. Avoid mixing different formulas or calculation methods.
  • Cell References: Use cell references (e.g., cell names or structured references) instead of hardcoding values within formulas. This makes it easier to update data without having to modify the formulas manually.
  • Check Formulas for Accuracy: Double-check all formulas for accuracy and ensure that they are correctly referencing the appropriate cells and ranges.
  • Use Named Ranges: Define named ranges for critical data ranges or input cells. Named ranges make formulas more readable and easier to manage.
  • Separate Calculations: If your spreadsheet includes complex calculations, consider separating them into different worksheets or sections. This enhances the clarity of the workbook and makes it easier to troubleshoot issues.
  • Formula Auditing Tools: Excel offers built-in auditing tools such as the “Trace Precedents” and “Trace Dependents” functions. Use these tools to trace the flow of data and formulas within your spreadsheet.
  • Error Handling: Implement error handling in your formulas, such as IFERROR or IF statements, to provide meaningful error messages or alternative calculations in case of errors.
  • Documentation: Document complex formulas and calculations for reference and troubleshooting. Include explanations of how the formulas work and any assumptions made.
  • Regular Review: Regularly review and validate the accuracy of your formulas, especially if there are changes to lease agreements or data inputs. Ensure that formulas remain up-to-date and compliant with ASC 842 requirements.
  • Version Control: Implement version control practices to keep track of changes made to formulas. Clearly document when and why changes were made.

  Best Practices for Document Organization

  Keeping track of lease documents within Excel templates can be challenging. Without a centralized repository, it becomes easy to misplace or lose critical documents, which can create audit complications and compliance issues. Here are some best practices for document organization for ASC 842 excel sheets:

  1. Use Separate Tabs or Worksheets: Create separate tabs or worksheets within your Excel workbook to store different types of lease documents. For example:
  • One tab for lease agreements
  • Another for lease amendments
  • A tab for disclosures and correspondence
  • A separate tab for audit documentation
  2. Clear and Consistent Naming Conventions: Develop a clear and consistent naming convention for your documents. Include relevant information such as the lease ID, document type, and date. For example: “LeaseID_Agreement_2023-10-24.pdf.”
  3. Folder Structure: Consider creating a folder structure outside of Excel to complement your organization. Store actual documents in folders based on lease ID or categories (e.g., active leases, terminated leases, amendments). Excel can reference these documents using hyperlinks or file paths.
  4. Hyperlinks: Use hyperlinks within your Excel spreadsheet to directly link to the corresponding documents stored in your folder structure. This allows easy access to documents with a single click.
  5. Document Tracker: Create a document tracking table or list within Excel that includes columns for document name, document type, lease ID, location (file path or hyperlink), and any additional notes or comments.
  6. Version Control: If you have multiple versions of lease documents (e.g., lease agreements with amendments), clearly indicate the version number or date in the document name. Keep the most recent version easily accessible.
  7. Document Index: Consider creating an index sheet within your Excel workbook that lists all lease documents with their associated lease IDs and types. This can serve as a quick reference guide to locate documents.
  8. Color Coding and Formatting: Use color coding or formatting to highlight critical information or identify document status. For example, you could use different colors to distinguish between active leases and terminated leases.
  9. Document Metadata: Include metadata in your Excel spreadsheet, such as lease start and end dates, lessor information, and lease classification. This allows you to quickly filter and sort documents based on key criteria.
  10. Regular Auditing: Periodically review your document organization system to ensure that it remains up-to-date and compliant with ASC 842 requirements. Remove obsolete documents and update document links if necessary.
  11. Backup and Security: Ensure that you have appropriate backup and security measures in place for your document storage system, especially if it contains sensitive lease information.
  12. Training: Train your team members on the document organization system to ensure everyone understands how to access and manage lease documents effectively.

  Common Challenges with ASC 842 Excel Templates

  While Excel templates offer a degree of flexibility, they come with several inherent disadvantages. This is especially important when documenting lease agreements because it can cause financial metrics to be incorrect, leading to penalties. Here are some of the common challenges when using excel templates:

  1. Data Accuracy

  Human errors in data entry and formula setup can lead to inaccuracies in financial reporting, potentially resulting in compliance violations and financial penalties.

  2. Security Risks

  Excel files are susceptible to security breaches. Sensitive lease data may be at risk if proper security measures are not in place, jeopardizing data privacy and compliance.

  3. Version Control

  Managing multiple versions of Excel templates can be confusing and prone to errors. Ensuring that everyone is working on the latest version can be challenging, leading to data inconsistencies.

  4. Audit Complications

  During audits, Excel templates can complicate the process. Auditors may spend significant time verifying data accuracy and formulae, which can lead to additional audit costs and delays.

  Excel Templates vs Lease Accounting Software for ASC 842

  Transitioning to specialized lease accounting software like Visual Lease offers several advantages over Excel templates:

  1. Data Accuracy and Automation

  Lease accounting software automates data entry and calculations, reducing the risk of errors and ensuring compliance with ASC 842.

  2. Enhanced Security

  Lease accounting software typically comes with robust security measures, safeguarding sensitive lease data from potential breaches.

  3. Version Control and Collaboration

  Software solutions facilitate version control and collaboration among team members, ensuring that everyone is working with the latest, most accurate data.

  4. Audit Readiness

  Lease accounting software streamlines audit processes by providing auditors with easy access to accurate, well-organized lease data.

  Leaving cumbersome spreadsheets for a purpose-built platform

  While Excel templates may initially seem like a cost-effective solution for ASC 842 lease accounting, their limitations and potential pitfalls can lead to compliance issues, security risks, and inaccuracies. To ensure compliance with ASC 842 and streamline lease accounting processes, organizations should consider transitioning to specialized lease accounting software like Visual Lease. Making this transition can save time, reduce errors, enhance security, and ultimately contribute to more accurate and efficient lease accounting practices. Learn more about switching from Excel to Visual Lease.

  • 

    Verified User in Transportation/Trucking/Railroad
    Enterprise (> 1000 emp.)

    May 10, 2023

    Visual lease allows us to move away from manually tracking hundreds of lease in excel and does all the heavy lifting for us.

    Posted on
  • 

    Randy O.
    Enterprise (> 1000 emp.)

    May 17, 2023

    Before Visual Lease we tracked everything in Excel. With over 70 leases now, it was a win win situation!

    Posted on
  • 

    Sungmo Y.
    Enterprise (> 1000 emp.)

    Nov 4, 2022

    ASC 842 reporting. This was a huge project for us in 2019 as we prepared for the transition from ASC 840 to ASC 842 and the annual audit. We were tracking everything using Excel before and, without Visual Lease, it would have been really difficult.

    Posted on
  • 

    Verified User in Government Administration
    Enterprise (> 1000 emp.)

    Oct 26, 2022

    “We initially used Excel to track key data and journal entries. Now we use VL to perform all calculations and report on our financials, saving us time and less human error in our calcs.”

    Posted on
  • 

    Adam B.
    Mid-Market (51-1000 emp.)

    May 17, 2022

    This software streamlines our Accounting for leases and completely replaces our existing Excel solution (for both GAAP and IFRS)

    Posted on
  • 

    Ryan B.
    Enterprise (> 1000 emp.)

    Oct 20, 2022

    The ease of use and the lease accounting function which allows you to run multiple lease calculations and scenarios for a lease. It has allowed us to move away from excel based spreadsheets and calculations and automate the calculations. Additionally we have realized great benefit from the centralized tracking and administration. We set up system alerts which send out emails to allow us to stay on top of upcoming term renewal windows so we can assure we make the best strategic decision.

    Posted on
  • 

    Andrew G.
    Mid-Market (51-1000 emp.)

    Oct 22, 2020

    The biggest problems we have solved with Visual Lease are the ASC 842 accounting entries and having a great way to store and calculate hundreds of leases. These calculations are far more accurate than anything an excel could do.

    Posted on
  • 

    Verified User in Hospital & Health Care
    Enterprise (> 1000 emp.)

    Oct 22, 2020

    I can easily make modifications to a lease (extension, renewal, payment amount change) and the system will accurately calculate the updated lease schedule and generate the appropriate accounting entries. This is so much better than our previous Excel system which was very manual.

    Posted on
  
  
  The post ASC 842 Lease Accounting Excel Templates first appeared on Visual Lease.]]> https://visuallease.com/what-are-the-roles-of-lessors-and-lessees-in-lease-accounting/ Wed, 01 Nov 2023 13:00:17 +0000 https://visuallease.com/?p=7702 Table of Contents What is a lessee? What is a lessor? Who is the lessor and lessee in a contract? Benefits for a Lessor vs Lessee How to approach accounting...
  The post What are the roles of lessors and lessees in lease accounting? first appeared on Visual Lease.]]>

  Table of Contents

  • What is a lessee?
  • What is a lessor?
  • Who is the lessor and lessee in a contract?
  • Benefits for a Lessor vs Lessee
  • How to approach accounting for lease agreements for lessor or lessee
  • Lessor accounting obligations
  • Lessee accounting obligations
  • Impact of ASC 842

  Lease contracts play an important role in the day-to-day of most organizations. But does your business thoroughly understand each party’s responsibilities? What about the benefits? These answers are critical to maintaining accurate and healthy lease accounting.

  What is a lessee?

  A lessee is an individual or entity that rents or leases property, equipment, or other assets from another party, known as the lessor. In a lease agreement, the lessee is granted the right to use the leased asset for a specified period of time in exchange for regular payments, typically referred to as rent or lease payments.

  What is a lessor

  A lessor is an individual or entity that owns an asset and leases or rents it out to another party, known as the lessee, in exchange for regular payments, usually called rent or lease payments.

  Who is a Lessor vs. Lessee in a Lease Agreement?

  Under a contractual lease obligation — be it commercial real estate, equipment or vehicles — there is always a lessor and a lessee. A lease is generally defined as a contractual arrangement in which one party, the lessor, provides an asset for use by the other party, the lessee. This arrangement is based on periodic payments for an agreed amount of time.

  Benefits for a Lessor vs Lessee

  Lease contracts offer distinct advantages for both lessors and lessees, contributing to their respective financial strategies and operational efficiencies.

  Benefits for a Lessor:

  1. Income Generation: By leasing out assets, lessors can generate consistent income through periodic lease payments, providing a steady revenue stream.
  2. Asset Utilization: Lessor can maximize the utilization of their assets by leasing them out to lessees, ensuring that the assets are not idle and generating returns.
  3. Risk Mitigation: Lessor retains ownership of the asset, allowing them to mitigate certain risks associated with ownership, such as maintenance and depreciation.
  4. Portfolio Diversification: By leasing out multiple assets across various industries or sectors, lessors can diversify their investment portfolio and reduce overall risk.

  Benefits for a Lessee

  1. Cost-Efficiency: Lessees can access and use high-value assets without the need for significant upfront capital investment, preserving their cash flow for other business operations.
  2. Flexibility: Leasing offers flexibility in terms of asset usage, allowing lessees to adapt to changing business needs without being tied down by long-term ownership commitments.
  3. Up-to-Date Technology: Leasing enables lessees to access the latest technology and equipment without the burden of owning outdated or obsolete assets, ensuring they remain competitive in their respective industries.
  4. Asset Management: Lessees can benefit from simplified asset management, as maintenance and upkeep responsibilities often fall on the lessor, reducing operational burdens.

  How to approach accounting for lease agreements for lessor or lessee

  Although different types of leases exist — such as finance and operating leases — the obligations have one thing in common. When it comes to lease accounting, leases must be reported accurately to meet regulatory compliance standards.

  Lessor accounting obligations

  Accurate accounting is vital to the health of any organization. As a lessor, accounting accuracy requires correctly classifying your leases—whether as sales-type, direct financing or operating.

  Under lease accounting standard ASC 842, ownership transfers to the lessee for accounting purposes for sales-type and direct financing leases. Sales-type leases require lessors to derecognize the underlying asset and instead recognize the lease’s net investment, selling profit or loss arising from the lease, and track the balance and interest income over time. Lessors record direct financing leases in a similar manner but defer the asset’s profit or loss.

  Operating leases give the lessee the right to use the asset but not ownership of it. Therefore, lessors record the asset, its related depreciation and lease payments in the books.

  Lessee accounting obligations

  Lessees must classify their leases as either finance or operating under the ASC 842 lease accounting standard. Both types of leases must appear in the organization’s balance sheet unless the term is 12 months or less, which is considered a short-term lease. For operating leases, lessees are expected to record payments as operating costs on the organization’s income statement.

  Impact of ASC 842

  How lease agreements are presented on balance sheets has changed for both lessors and lessees under ASC 842. Lessees now need to list all leasing obligations, including operating leases, on the balance sheet, categorizing them as either operating or finance leases. Lessors, who were already classifying leases, are less affected. Accurate classification and accounting are essential, and lease management software can assist in meeting these new requirements.

  Whether you are a lessor or a lessee, using a robust software solution like Visual Lease can help maintain accurate lease accounting — and protect the financial health of your business.

  The post What are the roles of lessors and lessees in lease accounting? first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-data-institute-forecasts-lease-management-as-a-leading-2024-business-priority-for-the-office-of-finance/ Tue, 31 Oct 2023 13:07:05 +0000 https://visuallease.com/?p=8857 Survey reveals 84% of enterprise organizations are prioritizing lease management due to lease accounting standards and emerging regulatory requirements around environmental impact reporting Woodbridge, N.J. – Oct. 31, 2023 –...
  The post Visual Lease Data Institute Forecasts Lease Management as a Leading 2024 Business Priority for the Office of Finance first appeared on Visual Lease.]]>

  Survey reveals 84% of enterprise organizations are prioritizing lease management due to lease accounting standards and emerging regulatory requirements around environmental impact reporting

  Woodbridge, N.J. – Oct. 31, 2023 – Visual Lease (VL), the #1 lease optimization software provider, today released the newest report from the Visual Lease Data Institute (VLDI), “The 2024 Office of Finance Outlook: Environmental Impact Reporting.” Findings from this report uncover how the heightened global focus on environmental, social and governance (ESG) programs is affecting how the Office of Finance must evolve to leverage lease portfolios to meet regulatory requirements and achieve more strategic financial and operational outcomes.

  VL reports that nearly 70% of surveyed senior finance executives say that their organizations are not fully prepared to track and measure the environmental impact of their leased and owned asset portfolios in order to comply with new and emerging requirements. In 2023 alone, various regulatory bodies have committed to introducing standardization to the environmental reporting process, including the International Sustainability Standards Board (ISSB), The Securities and Exchange Commission (SEC) and most recently, California’s state government, further highlighting the importance of strong lease management.

  “Considering that 40% of global carbon dioxide emissions stem from real estate-related assets, effective lease management serves as an organization’s gateway to not only quantifying and disclosing its environmental impact but, also to tracking its progress against internal and external sustainability goals,” said Robert Michlewicz, CEO of Visual Lease. “Without a strong level of control over your leased and owned assets, you risk inaccurate financial reporting and as a result, damaged relationships with crucial stakeholders, including consumers, investors and employees.”

  Investing in dedicated technology can also address concerns that 99% of surveyed senior finance executives have with maintaining control over their organization’s lease portfolio, including concerns about data accuracy and completeness (48%), sustaining lease accounting compliance (44%) and compliance with ESG requirements and policies (44%).

  “Despite how critical data collection and management is in the reporting process, our study found that 51% of enterprise organizations are either relying on Excel or a third party to help them manage their lease administration processes,” said Michlewicz. “However, it is imperative that the Office of Finance leverages a centralized system of record with a strong controls framework to ensure complete and accurate asset data and emissions inventory.”

  The new VLDI report found that prioritizing ESG initiatives remains top-of-mind for most senior finance and accounting executives at companies with more than 1,000 employees, with 90% looking to enact new sustainability goals within the next 2-5 years, and 97% saying they are currently involved with ESG reporting decisions within their organization.

  Additional findings on organizations’ commitments to ESG program development and reporting include:

  • 88% of surveyed senior finance executives say that sustainability factors are a high priority when entering into new lease agreements, such as increasing the number of LEED-certified buildings in their lease portfolios or increasing the number of energy-efficient vehicles in their fleets.
  • Less than one-third of senior finance executives report that their ESG reporting framework is fully established and includes a variety of environmental factors, with 30% disclosing that their framework is limited to specific organization initiatives.
  • While the majority of surveyed senior finance executives reported that they’ve collected key environmental data, less than 40% have analyzed or used the data to establish benchmarks.

  To download the report and view the full data findings, click here.

  Visual Lease conducted a national survey of 200 U.S. senior finance executives at private, public and government organizations with more than 1,000 employees.

  About Visual Lease

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage more than 1 million real estate, equipment and other leased asset records globally. For more information, visit visuallease.com.

  About the Visual Lease Data Institute

  The Visual Lease Data Institute is a collection of market-leading data, trends and insights on lease accounting, management, sustainability reporting and optimization created and curated by Visual Lease, provider of the #1 lease optimization software. The Institute was founded on 35+ years of experience managing lease data and financials, and was created to empower organizations with the market data required to leverage their lease portfolio for strategic financial and operational outcomes.

  Media Contact:

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Visual Lease Data Institute Forecasts Lease Management as a Leading 2024 Business Priority for the Office of Finance first appeared on Visual Lease.]]> https://visuallease.com/how-to-calculate-the-present-value-pv-of-future-lease-payments-in-excel/ Mon, 30 Oct 2023 13:00:40 +0000 https://visuallease.com/?p=8845 Table of Contents How to Calculate the Present Value of Lease Payments in Excel Step 1: Organize Data Step 2: Use the PV Function Step 3: Repeat as Needed Cons...
  The post Calculating Present Value of Lease Payments first appeared on Visual Lease.]]>

  Table of Contents

  • How to Calculate the Present Value of Lease Payments in Excel
  • Step 1: Organize Data
  • Step 2: Use the PV Function
  • Step 3: Repeat as Needed
  • Cons of Using Excel: Changes in Lease Payment Schedule
  • The Importance of Lease Calculations in Compliance
  • Calculating the Present Value of Lease Payments with Visual Lease Accounting Software
  • Improving your Lease Management Process
  • Make the Switch from Excel to Visual Lease Software

  Leasing is a common practice for businesses of all sizes, offering flexibility and financial advantages. However, to accurately account for leases and comply with accounting standards like ASC 842, calculating the Present Value of Lease Payments (PV) is essential. While Excel is a commonly used tool for this task, there are better technologies to ensure compliance. In this article, we’ll walk you through the steps to calculate the Present Value of Lease Payments in Excel and highlight the importance of accuracy in lease calculations. We’ll also explore why switching to an established provider is a smart move for lease accounting.

  How to Calculate the Present Value of Lease Payments in Excel

  Excel is a versatile tool for various financial calculations, including determining the present value of lease payments. Follow these steps to perform the calculation:

  Step 1: Organize Data

  Before diving into calculations, ensure that you have all the necessary lease data organized. This should include:

  • Interest rate per period (rate)
  • Total number of payment periods (nper)
  • Payment amount for each period (pmt)

  Having this information at your fingertips will make the calculation process much smoother.

  Step 2: Use the PV Function

  In an empty cell, use the Excel formula for calculating the present value. The formula typically used is:

  =PV(rate, nper, pmt)

  • Rate: Enter the interest rate per period. Ensure that the rate is consistent with the payment frequency (e.g., annual rate for annual payments).
  • NPER: Input the total number of payment periods over the lease term.
  • PMT: Enter the payment amount for each period. Make sure to include any relevant negative sign (for outflows).

  After inputting these values, Excel will calculate the present value of lease payments, which represents the total value of future lease payments in today’s dollars.

  Step 3: Repeat as Needed

  If you have multiple lease agreements or different payment schedules, you can repeat the above steps for each lease to calculate their respective present values.

  Cons of Using Excel: Changes in Lease Payment Schedule

  The PV function in Excel is easy to use, but it is very limited in function. It cannot accommodate changes in the payment schedule during the lease term. That is why most users will utilize the NPV function instead. While it accommodates changes, each payment must be entered individually, even if the payments are unchanged, as well as periods where the payment amount is zero.

  Both PV and NPV only deal with full periods (usually based on a month, although other periods can be selected).  Sometimes, though, a partial period is required in the calculation of NPV, for example when the payment is not at the beginning or end of the calendar month. That can be done with Excel, but this requires creating a complex model.  Also, the payment methodology (beginning or end of period, see below) is important for making PV work with lease accounting schedules. This is an extra step in the PV or NPV functions, one not often used. This can create errors which are difficult to reconcile.

  The Importance of Lease Calculations in Maintaining Compliance

  Accurate lease calculations are crucial for several reasons, ranging from financial transparency and regulatory compliance to effective decision-making and risk management. Here are some of the most common reasons why having accurate lease calculations is important:

  • Financial Transparency: Accurate calculations ensure that your financial statements accurately represent your organization’s financial position, helping stakeholders make informed decisions.
  • Compliance: Regulatory standards like ASC 842 demand accuracy in lease calculations. Errors can lead to compliance violations and regulatory penalties.
  • Audit Preparedness: Accurate calculations make audit processes smoother, reducing the risk of audit issues and delays.
  • Budgeting and Planning: Precise lease calculations aid in budgeting and financial planning, helping organizations allocate resources effectively.
  • Contract Negotiations: Accurate calculations provide a strong foundation for lease negotiations, allowing organizations to make informed decisions about lease terms.

  Each of the lease accounting standards (ASC 842, IFRS 16, GASB 87) specifies methodology for calculating interest, straight-line rent, ROU Asset amortization, and Liability reduction.  If the present value calculation does not perfectly align with the schedule, the ROU Asset and Liability will not amortize to zero at the end of the lease term.  This is a red flag for auditors.

  Calculating the Present Value of Lease Payments with Visual Lease Accounting Software

  While Excel is a useful tool, it has limitations, and managing complex lease portfolios can be challenging. That’s where Visual Lease software comes in.

  Visual Lease can calculate the Net Present Value of a lease accounting schedule in one of two ways. The following describes these ways in terms of the Excel function NPV, and B1 through BN are the individual payments:

  • Beginning of the Period: This method deducts the payment amount from the principal, then calculates the periodic interest. The formula is NPV(Annual Rate/12, B2:Bn) + B1 .
  • End of the Period: This method calculates the periodic interest, then deducts the payment amount from the principal. The formula is NPV(Annual Rate, B1:Bn).

  If the initial period is partial (begins any day other than first of a month), the methods are as follows, referencing the Excel function PV. The platform creates individual present values for each period i as PV(Annual Rate/12,Period,,-Bi) where Bi is the payment for the ith period, and sums the values for the initial liability value, according to one of these methods:

  • Beginning of the Period: This method uses the full face value of the first payment. It then discounts the second payment by the fractional initial month. For each subsequent payment, it increases each subsequent period by adding 1 to the prior period value.
  • End of the Period: This method discounts the first payment by the fractional initial month. For each subsequent payment, it increases each subsequent period by adding 1 to the prior period value.

  The Net Present Value of payments affects the Right of Use Asset Starting Balance, Total Ending Liability Starting Balance, and Interest for all schedules affecting the balance sheet.

  Users can easily select their preference in the Net Present Value Calculation Method drop-down within VL. This can

  Visual Lease simplifies the process of calculating PV and offers numerous advantages:

  • Automation: Visual Lease automates lease calculations, reducing the risk of errors and saving you time.
  • Accuracy: With a dedicated platform for lease accounting, Visual Lease ensures accuracy in all calculations, helping you stay compliant with accounting standards.
  • Comprehensive Reporting: Generate detailed and customizable reports for better insights into your lease portfolio.
  • Centralized Document Management: Store and manage all lease documents in one secure location.
  • Audit Trail: Visual Lease maintains an audit trail, making it easier to track changes and ensure transparency.
  • Compliance: Visual Lease is designed to keep you compliant with the latest accounting standards, reducing the risk of regulatory issues.

  Improving your Lease Management Process

  Calculating the present value of lease payments is a critical aspect of lease accounting. While Excel can handle these calculations, it comes with limitations and potential risks. Transitioning to Visual Lease software not only simplifies the process but also offers enhanced automation, accuracy, compliance, and reporting capabilities. If you’re serious about lease accounting, Visual Lease is the smart choice to ensure accuracy and efficiency in your lease management processes.

  Making the Switch from Excel to Visual Lease Software

  When Excel can’t keep up with multiple leases and running reports is an extremely manual process, it’s time to consider a better option. Switching from Excel to Visual Lease is a straightforward process. Visual Lease’s proven migration methodology ensures completeness, consistency and sustainable workflows.

  

  Visual Lease offers an easy transition, and like our customers, your organization can quickly realize the benefits of using specialized lease management software:

  • CURO Group Holdings Corp. saved hundreds of hours with portfolio automation
  • Bassett Furniture gained 50% more efficiency by using VL as a system of record
  • PennState Health saved over 180 hours of work per year by integrating technologies
  • Efficiency: Visual Lease streamlines lease management, saving you time and reducing manual data entry.
  • Accuracy: With automated calculations, you can trust that your lease data is accurate.
  • Compliance: Visual Lease ensures compliance with ASC 842 and other accounting standards.
  • Advanced Reporting: Access advanced reporting and analytics to gain valuable insights into your lease portfolio.
  • Document Management: Store and organize all lease-related documents within the platform.
  • Audit Readiness: Visual Lease prepares you for audits with accurate and well-documented lease data.

  Switch to Visual Lease today to experience the difference.

  The post Calculating Present Value of Lease Payments first appeared on Visual Lease.]]> https://visuallease.com/leasehold-improvements-what-you-need-to-know-for-asc-842/ Wed, 25 Oct 2023 14:00:12 +0000 https://visuallease.com/?p=5658

  

  Table of contents: 

  • What are leasehold improvements?
  • Examples of leasehold improvements
  • Are Leasehold Improvements Considered Lease Incentives?
  • How leasehold improvements impact ASC 842

  As you navigate the complexities of ASC 842 compliance, you may be wondering how and when to account for leasehold improvements.

  What are leasehold improvements?

  From an accounting standpoint, leasehold improvements are any modifications, enhancements or additions made by a tenant to their leased space (or the “leasehold interest”) that add business value.

  Tenants often make these improvements to their leased spaces to:

  • Customize the layout and design of their leased space
  • Improve ergonomics and make the space more employee- or customer-friendly
  • Brand the leased space with a company’s look and feel

  Examples of leasehold improvements

  Leasehold improvements can be any update or change to a leased property’s interior finishes beyond what the landlord provides as standard.

  They may include upgrades to drywall, electrical, flooring, carpentry and similar features, as well as permanently affixed displays, shelving, partitions, lighting, signage and other enhancements that help customize the space.

  Leasehold improvements may be made at any time during the term of a lease — or before moving into a space.

  For instance, in a new shopping mall, a landlord typically provides a “vanilla box” that a retailer will want to customize with improvements — adding dressing rooms, sales counters and other features that will make the leasehold interest more valuable as a business location.

  Furthermore, enhancements that are not considered a leasehold improvement include modifications to exterior or shared spaces, as well as interior features such as data cabling, furniture, non-permanent fixtures or equipment that can be removed when the tenant moves out.

  Are Leasehold Improvements Considered Lease Incentives?

  Leasehold improvements and lease incentives are distinct concepts in the realm of leasing agreements. Leasehold improvements refer to modifications or enhancements made to a leased property by the tenant to better suit their specific needs or business operations. These improvements typically remain with the property at the end of the lease term. On the other hand, lease incentives are concessions offered by landlords to attract tenants, such as rent-free periods, cash allowances, or assistance with moving costs. While both leasehold improvements and lease incentives can enhance the overall leasing experience, they serve different purposes: the former focuses on customizing the space, while the latter aims to make the lease agreement more appealing to potential tenants.

  How do leasehold improvements impact ASC 842?

  Leasehold improvements are reported as property, plant and equipment (PP&E) assets on the balance sheet. ASC 842 does not change the way they are handled, unless a tenant uses a tenant improvement allowance to make their improvements.

  When a tenant makes leasehold improvements using a tenant improvement allowance, ASC 842 requires a different treatment than the previous accounting under ASC 840. Under ASC 842, a tenant improvement allowance is treated as a lease incentive that reduces the ROU asset. If the tenant improvement allowance is not yet received, the lease liability is also reduced in future minimum lease payments.

  Here are the basics you need to know about leasehold improvements relating to ASC 842 compliance:

  What is a tenant improvement allowance?

  A tenant improvement allowance (also called a TI allowance or TIA) may be offered to a tenant by a landlord, which the tenant may choose to use to pay for leasehold improvements. It is one of several types of lease incentives that a landlord may offer to attract tenants and is often part of lease negotiations.

  The TI allowance amount will be included in the lease, along with how it will be paid. For example, it may be offered as a rent discount, paid directly to contractors or provided as a reimbursement to the tenant after the work is complete. The lease may also stipulate what leasehold improvements the allowance may cover.

  Reporting a TI allowance for leasehold improvements

  Under ASC 840, a TI allowance (or other lease incentive) was generally reported as a separate liability. The liability would have been reduced on a straight-line basis and reduced rent expense.

  Now, under ASC 842, if a TI allowance is paid to a tenant up front, it reduces the tenant’s ROU asset, but adds a leasehold improvement asset in the amount that was paid. In other words, the tenant now has a lower lease cost and a separate monthly expense related to the leasehold improvement.

  For example, suppose an ROU asset is calculated at $1 million and the landlord offers a lease incentive of $100,000 in a TI allowance. The result would be a $100,000 reduction in the ROU asset and $100,000 in leasehold improvement (PP&E) assets:

  ROU asset $1,000,000 – TI allowance $100,000 = Total assets $900,000 lease + $100,000 PP&E

  Tracking and managing lease details

  Although leasehold improvements themselves are not affected by ASC 842, there are implications in the context of lease incentives and TI allowances as part of new lease negotiations.

  Understanding leasehold improvements, lease incentives and the latest accounting treatments is critical to compliance with ASC 842. At the very least, tenants should keep track of all leasehold improvement costs, since they are assets that can be amortized or depreciated.

  Leasehold improvements and lease incentives are just some of the critical details that need to be tracked for effective lease accounting and management. A technology solution like Visual Lease makes it easy for you to track these and other crucial aspects of your lease portfolio.

  To learn more, contact us at (888) 876-6500 — or to see Visual Lease in action, request a demo. 

  Read More Content About ASC 842
  

  

  ASC 842 Compliance Software

  

  ASC 842 Summary

  

  ASC 842 Balance Sheet

  The post Leasehold improvements: What you need to know for ASC 842 first appeared on Visual Lease.]]> https://visuallease.com/is-your-lease-accounting-in-need-of-a-digital-transformation/ Mon, 23 Oct 2023 21:10:57 +0000 https://visuallease.com/?p=8810 Lease accounting and management have evolved into intricate processes, posing fresh challenges for financial leaders. From grappling with an accountant shortage to seeking enhanced lease flexibility during economic uncertainty and...
  The post Is Your Lease Accounting in Need of a Digital Transformation?  first appeared on Visual Lease.]]> Lease accounting and management have evolved into intricate processes, posing fresh challenges for financial leaders. From grappling with an accountant shortage to seeking enhanced lease flexibility during economic uncertainty and preparing for imminent ESG reporting obligations, the office of finance has never been in more need of a robust system of record and process automation. 

  Digital transformation necessitates a robust technology-driven framework, underpinned by effective controls, to navigate (and automate) the complexities of lease accounting and meet eventual ESG reporting standards.  

  To achieve digital transformation in lease accounting, organizations can consider these best practices: 

  Digitize your leases and centralize them in a dedicated system of record 

  Leases are complex and dynamic documents –  it’s critical that organizations understand and digitize the terms of their lease. Misunderstandings about financial obligations often result in delayed payments, overpayments, and missed opportunities for cost savings. By tracking leases systematically, organizations can optimize their portfolios and even identify opportunities for value creation.   

  For example: A company has 20 forklifts, split 10 each at 2 warehouses. One warehouse is 50% idle, while the other is overcapacity and oftentimes has forklifts down for service. Reallocating some of the assets to the overcapacity facility (portfolio optimization) saves money from excessive wear and tear and increases capacity.   

  A lease management system allows organizations to view and track key clauses, obligations and other lease information including master leases, subleases, lease options, critical dates and special scenarios in real estate, equipment, operating or any other leased asset. 

  Take Preemptive Action on ESG Reporting 

  With numerous ESG regulations already in place and more on the horizon, organizations must proactively prepare to meet these reporting requirements. Investors, employees, and customers are closely monitoring ESG disclosures, demanding greater transparency. Without the ability to report on environmental aspects of their leased and owned assets, such as water consumption and carbon emissions, property owners risk alienating key stakeholders. They may also find themselves ill-prepared to comply with forthcoming climate change regulations and reporting standards.  

  Providing organizations with environmental transparency aligns with their internal ESG objectives, making it an attractive proposition. By implementing robust lease controls and leveraging a carbon accounting tool, organizations can position themselves as pioneers in this space. 

  Lease accounting was never a walk in the park, and its complexities have only deepened with the introduction of ESG reporting standards. As these standards continue to expand, organizations and their accounting teams must adapt. Digitizing and implementing the right technology is the key to successful reporting and upkeep in this evolving landscape, ensuring teams can meet an expanding array of business requirements. 

  Discover more about the VL ESG Steward here. 

  The post Is Your Lease Accounting in Need of a Digital Transformation?  first appeared on Visual Lease.]]> https://visuallease.com/top-3-best-practices-for-lease-management/ Mon, 23 Oct 2023 14:00:04 +0000 https://visuallease.com/?p=8798 Lease management is more complicated than ever before. Tenants and landlords are navigating a lot of hurdles, including organizations’ need for greater flexibility – according to the Visual Lease Data...
  The post Top 3 Best Practices for Lease Management first appeared on Visual Lease.]]> Lease management is more complicated than ever before. Tenants and landlords are navigating a lot of hurdles, including organizations’ need for greater flexibility – according to the Visual Lease Data Institute companies are prioritizing agility within their leases, with 88% of senior Real Estate Executives reporting that companies are planning for physical space needs just one year or less in advance – and now ESG reporting requirements on the horizon. The standards released by the International Sustainability Standards Board (ISSB) are expected to be followed soon by guidelines from the SEC, adding another layer of complexity specifically for landlords who will be responsible for this reporting.

  All of these changes require the right technology-backed controls framework to successfully meet both lease accounting and ESG reporting standards. Here are three ways the right lease management can help organizations stay on top of these changes. 

  1. Ensure clear communication and documentation

  Leases are complex and dynamic documents –  it’s critical that tenants understand and can track the terms of their lease. Misunderstandings about expenses and what’s owed can often lead to late payments and negatively impact a tenant-owner relationship. This also helps property owners track tenant payments to identify more financially stable and accountable tenants who pay rent and other expenses on time. The right lease controls ultimately benefit both parties through improved communication and a better understanding of the lease agreements.

  2. Increase lease agility and flexibility

  Tenants increasingly want the flexibility to react to changing circumstances, whether that is a dynamic work schedule or an uncertain economy. The ability to track a tenant’s performance or occupancy through lease management will help inform property owners on how to structure future agreements and establish more individualized terms for each tenant. Lease management can also improve communication between both parties by allowing them to quickly convey messages like important dates about the building and potentially dangerous weather.

  3. Staying ahead of ESG reporting requirements

  ESG regulations are here and more are around the corner, so company leaders need to be planning ahead to stay in front of reporting requirements. This reporting is also likely to be closely watched by investors, employees and customers who all have indicated they expect to see greater transparency from companies when it comes to where things stand with ESG.

  Owners run several risks if they do not have the ability to report on their leased and owned asset portfolios’ environmental output – from water usage to carbon emissions and on. These risks include falling out of favor with key stakeholders, including employees, tenants and investors, and being wildly unprepared for climate change regulations and reporting standards. Having the ability to provide this level of environmental transparency to tenants will only gain in appeal as it allows them to use these metrics toward their own internal ESG goals as well. Implementing strong lease controls and the right tracking technology, like the VL ESG Steward, now will position these owners ahead of the rest. 

  The bottom line: The right lease controls will enable successful reporting within a complex system.

  Lease accounting has never been easy, and it’s only become more complicated with the introduction of new ESG reporting standards, which will ultimately fall to organizations and their accounting teams to manage and maintain. ESG standards are only expected to expand, which means companies will have to further adapt their accounting to suit regulations. The right controls in place will enable successful reporting and maintenance for teams that must meet a growing range of business needs. 

  Learn more about the VL ESG Steward here.

  The post Top 3 Best Practices for Lease Management first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-reports-robust-third-quarter/ Mon, 16 Oct 2023 14:17:26 +0000 https://visuallease.com/?p=8765 Longstanding pioneer in lease management and accounting continues to advance its platform capabilities to address evolving environmental reporting requirements Woodbridge, NJ – October 16, 2023 — Visual Lease (VL), the...
  The post Visual Lease Reports Robust Third Quarter first appeared on Visual Lease.]]>

  Longstanding pioneer in lease management and accounting continues to advance its platform capabilities to address evolving environmental reporting requirements

  Woodbridge, NJ – October 16, 2023 — Visual Lease (VL), the #1 lease optimization software provider, today announced its results from Q3 2023, reporting sustained double-digit annual recurring revenue and customer percentage growth, year-over-year.

  “A forthcoming analysis from The Visual Lease Data Institute indicates that 99% of senior accounting and finance executives from companies with more than 1,000 employees have made lease management a higher priority in light of the new lease accounting standards and rising, widespread interest in sustainability,” said Robert Michlewicz, CEO of Visual Lease. “Our continued growth and industry recognition reflects our unique ability to address this pivotal shift in the Office of Finance, which is rooted in VL’s 25+ years of experience maximizing the value organizations receive from their lease portfolio. We continue to invest in our people, platform and the services we provide to empower our growing community of 1,500+ customers to leverage their lease portfolio for strategic financial and operational outcomes.”

  In Q3, Visual Lease:

  Solutions & Services

  • Enhanced its GASB Roll Forward Report for lessees, which provides detail of the asset and liability activity that occurred in the reporting period. This report makes it easy for organizations that need to comply with the GASB standards 87 and 96 to manage and reconcile period-over-period changes to their balance sheet accounts, and can also be used to help in preparing statements of cash flows.
    
    
  • Hosted its second annual Customer Advisory Board (CAB) Summit in San Antonio, TX, a multi-day event where select customers and partners gathered to discuss industry trends, as well as review and provide feedback on VL’s roadmap. During the summit, VL unveiled the winners of its annual Customer Excellence Awards, recognizing American Axle Manufacturing, Compass, Quanta Services and RSM US LLP for capitalizing on VL’s unique capabilities to streamline critical workflows, promote cross-departmental collaboration and ensure data accuracy.
  • Welcomed Gene Cook as Vice President of Global Partners, responsible for helping the company expand the value it provides to its growing network of Global Partners across leading accounting firms, professional services organizations, commercial real estate firms and solution providers.

  Industry Recognition

  • Named a Leader in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Lease Accounting and Administration Applications 2023 Vendor Assessment (doc # US48562222, August 2023), the first analyst report to provide a comprehensive evaluation of the combined lease accounting and lease administration capabilities of more than a dozen solution providers. According to Kevin Permenter, Research Director at IDC, the analysis found that, “VL offers substantial platform extension capabilities around tracking and reporting on the environmental impact of leased and owned assets to support their clients’ ESG initiatives and help organizations harness the power of their portfolio to enhance business resiliency.”
  • Received two awards for its newest offering, VL ESG Steward, recognized as a finalist for a Software as a Service (SaaS) award within the category of Best SaaS Product for CSR, Sustainability and ESG, and also named a Sustainability Product of the Year by the Business Intelligence Group. VL ESG Steward is the first solution of its kind within the lease accounting and administration space designed to empower users to report on the environmental impact of their owned and leased assets in accordance with the sustainability disclosure requirements from the International Sustainability Standards Board (ISSB), IFRS S1 and IFRS S2.
  • Recognized by G2 as a Leader and High Performer for Enterprise businesses in both the Lease Administration and Lease Accounting categories, as well as Leader and High Performer status in both categories for businesses of all sizes.

  Company Culture

  • Named a Best Place to Work in New Jersey by NJBIZ for the fourth consecutive year, recognized for its culture, strong leadership, high levels of employee satisfaction and the many growth and development opportunities provided to the team.
  • Hosted its inaugural VL Week, providing an opportunity for employees to learn, connect with one another and apply key concepts that are critical to supporting its customers, collaborating with its global partners and achieving shared corporate goals. The week consisted of informative sessions, workshops and volunteer opportunities with local organizations Elijah’s Promise and Clean Ocean Action. .

  To keep up with the latest findings from The Visual Lease Data Institute and additional announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage more than 1 million real estate, equipment and other leased asset records globally. For more information, visit visuallease.com.

   

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 770 2270
  ebonavitacola@visuallease.com     

  The post Visual Lease Reports Robust Third Quarter first appeared on Visual Lease.]]> https://visuallease.com/understanding-californias-new-climate-disclosure-laws-sb-253-and-sb-261/ Wed, 11 Oct 2023 13:00:03 +0000 https://visuallease.com/?p=8751 California has taken a significant step toward addressing climate change by enacting the ground-breaking California Climate Accountability Package. This legislation not only sets the stage for comprehensive reporting of carbon...
  The post Understanding California’s New Climate Disclosure Laws – SB 253 and SB 261 first appeared on Visual Lease.]]>

  California has taken a significant step toward addressing climate change by enacting the ground-breaking California Climate Accountability Package. This legislation not only sets the stage for comprehensive reporting of carbon emissions but also expands the scope of companies impacted, going beyond publicly traded entities. 

  In this post, we’ll delve mainly into the details of SB 253, its implications, and the broader landscape of environmental disclosure.

  What is the California Climate Accountability Package?

  The California Climate Accountability Package comprises two bills, Senate Bill 253 (SB 253) and Senate Bill 261 (SB 261), which mandate both public and private companies operating in California to disclose their greenhouse gas (GHG) emissions as well as climate-related financial risk. These bills were signed into law by Governor Newsom on October 9, 2023.

  What is SB-253? Who does it impact?

  SB-253, at its core, establishes a robust reporting framework for carbon emissions. Unlike other environmental disclosure laws, SB-253 primarily focuses on carbon emissions and does not encompass additional factors like water waste or biodiversity standards. However, it goes further than future federal SEC guidelines, as it applies to both public and private companies with a revenue threshold of at least $1 billion, doing business in California – expanding the potential scope to a wide range of entities.

  What’s Included in SB-253:

  • Expanded Coverage: While the SEC regulations will apply primarily to publicly traded companies, SB-253 extends its reach to private companies that meet the revenue threshold, making it applicable to a more extensive group of businesses. The mandated Scope 3 disclosure brings many additional companies under coverage (regardless of their revenue).
  • Mandated Scope 3 Disclosures: One significant feature of SB-253 is the requirement for reporting on scope 3 emissions. Although it leaves room for interpretation, this expands the responsibility of businesses to account for indirect emissions, such as employee commutes and business travel.
  • Financial Risk Disclosure: SB-253 introduces the Climate-Related Financial Risks Act (SB-261), applicable to companies with a lower revenue threshold of $500 million. This aspect focuses on financial risk disclosure, emphasizing the need for companies to understand and report on the environmental impact of their operations.
  • Incremental Reporting: Companies will need to start gathering data for scope 1 and scope 2 emissions from January 2025, with the first reporting year set for 2026. For scope 3, data collection begins in January 2026. This gradual approach allows companies time to prepare for the reporting requirements.
  • Increasing Assurance Levels: The law outlines a transition from limited assurance to reasonable assurance for reporting by 2030. This progression emphasizes the importance of accurate and reliable reporting, requiring businesses to prove their emissions data through a full audit trail.

  SB-253 represents a significant shift in the landscape of climate disclosure, not only in California but potentially influencing environmental reporting practices nationwide. Its broader coverage, scope 3 requirements, and increasing assurance levels place a premium on accurate data collection and reporting.

  The Impact of SB-253:

  The California Climate Accountability Package is set to transform climate disclosure practices and emissions reporting for more than ~10,000 companies. Advocates argue that this enhanced accountability will drive large corporations, major greenhouse gas emitters, to reduce their carbon footprint. It also empowers consumers and regulators to identify laggard companies and push them toward climate action, while revealing firms with significant climate-related financial risks. Forward-thinking companies already measuring and disclosing their greenhouse gas emissions will benefit from the proposed reporting framework, which emphasizes their initiatives. 

  Businesses are gearing up for upcoming disclosures, like the SEC Climate Proposal, reflecting investors’ demand for consistent, reliable climate-related financial information. Many organizations are committed to achieving net-zero emissions, and transparency will enable investors to assess their progress. The new reporting requirements will also help identify value-creation opportunities through accurate carbon accounting, offering insights into emissions profiles and hotspots. These insights can lead to cost-of-capital reductions for sustainability-oriented firms and cater to consumers willing to pay premiums for eco-conscious brands or adjust their buying habits to reduce their carbon footprint.

  California’s SB-253 is a significant step toward comprehensive climate disclosure. It not only expands the reporting scope but also emphasizes the need for accurate data and reasonable assurance. Whether driven by compliance or operating in self-interests, businesses should recognize the importance of environmental reporting in a world increasingly focused on sustainability and climate action. SB-253 sets the stage for a more transparent and accountable future, where businesses must take responsibility for their carbon emissions.

  What is SB-261?

  SB 261, also referred to as the Climate-Related Financial Risk Act, is a California statute designed to enhance transparency regarding climate-related financial risks confronting certain businesses. This legislation mandates that companies with annual revenues exceeding $500 million must:

  • Compile biennial reports detailing their climate-related financial risks and strategies for risk mitigation.
  • Commence reporting by no later than January 1, 2026.
  • Adhere to the guidelines outlined in the Task Force on Climate-Related Financial Disclosure (TCFD) framework.

  In essence, SB 261 strives to shed light on the financial vulnerabilities businesses encounter due to climate change, promoting greater awareness and preparedness.

  How Can VL ESG Steward Help?

  For businesses affected by SB-253 and SB-261, tracking and reporting emissions accurately is paramount. VL ESG Steward provides a platform for capturing, tracking, and reporting on direct and indirect emissions, offering a full audit trail to ensure data accuracy. As regulations evolve, VL continues to enhance its capabilities to meet the specific reporting needs of businesses.

  The post Understanding California’s New Climate Disclosure Laws – SB 253 and SB 261 first appeared on Visual Lease.]]> https://visuallease.com/unraveling-common-area-maintenance-cam-charges-a-comprehensive-guide/ Mon, 09 Oct 2023 13:00:49 +0000 https://visuallease.com/?p=8733 In the world of commercial real estate leasing, Common Area Maintenance (CAM) charges play a pivotal role, impacting both landlords and tenants. CAM rent, often referred to as CAM fees,...
  The post Unraveling Common Area Maintenance (CAM) Charges: A Comprehensive Guide first appeared on Visual Lease.]]> In the world of commercial real estate leasing, Common Area Maintenance (CAM) charges play a pivotal role, impacting both landlords and tenants. CAM rent, often referred to as CAM fees, can significantly influence a tenant’s overall occupancy costs. In this comprehensive guide, we will delve into the intricate details of CAM charges, demystifying what CAM encompasses, the intricacies of CAM fees in leases, how it differs from operating expenses and implications for lease accounting.

  What is Common Area Maintenance (CAM)?

  Common Area Maintenance, or CAM for short, refers to the costs associated with maintaining and operating common areas within a commercial property or complex. These common areas typically include lobbies, hallways, elevators, parking lots, landscaping, and shared facilities like restrooms or fitness centers. CAM charges are an additional expense that tenants may incur beyond their base rent.

  CAM Fees in Leases

  CAM fees are often a point of negotiation in commercial lease agreements. When tenants lease space in a commercial property, they may be required to pay a share of the CAM expenses. The specific terms and calculations for CAM fees can vary widely depending on the lease agreement.

  The calculation of Common Area Maintenance (CAM) fees can vary depending on the terms outlined in the lease agreement. While there is no one-size-fits-all formula, here’s a general overview of how CAM fees are typically calculated:

  • Pro-Rata Share: CAM fees are often allocated based on a tenant’s pro-rata share of the total leasable space within the commercial property. This means that the larger the space a tenant occupies, the greater their CAM fee responsibility.
  • Expense Pool: Landlords accumulate all eligible CAM expenses incurred during a specified period, usually a fiscal year. These expenses include property management fees, landscaping costs, utilities for common areas, janitorial services, repairs, and other qualifying expenditures.
  • Calculating Tenant’s Share: To determine a tenant’s CAM fee for the period, landlords divide the tenant’s leasable square footage by the total leasable square footage in the property. This ratio is then applied to the total CAM expenses for that period. The formula may look like this:

  (Tenant’s Leasable Square Footage / Total Leasable Square Footage) x Total CAM Expenses = Tenant’s CAM Fee

  • Annual Reconciliation: Typically, CAM fees are estimated at the beginning of the lease term based on expected expenses. After the fiscal year ends, landlords perform an annual reconciliation. They compare the estimated CAM fees paid by tenants with the actual expenses incurred during that period. Depending on the lease terms, tenants may be required to pay any shortfall or receive a credit for overpayment.
  • Caps and Limits: Some lease agreements may include caps or limits on the annual increase in CAM fees to protect tenants from steep cost escalations. This helps tenants maintain cost predictability.

  What Does Common Area Maintenance Include?

  Common Area Maintenance charges encompass a wide range of expenses associated with the upkeep and operation of shared spaces. These expenses can include:

  • Property Management: Costs related to property management services, such as salaries, administrative costs, and management fees.
  • Utilities: Expenses for common area utilities like electricity, water, gas, and sewer.
  • Landscaping and Grounds Maintenance: Costs for maintaining outdoor spaces, including lawn care, tree trimming, and landscaping.
  • Janitorial Services: Expenses for cleaning and maintaining common areas like hallways, restrooms, and lobbies.
  • Repairs and Maintenance: The cost of repairing and maintaining common elements, including HVAC systems, elevators, parking lots, and structural repairs.
  • Security: Costs associated with security services and systems that protect the property and its tenants.
  • Insurance: Common area insurance, which covers liability and property insurance for shared spaces.
  • Taxes: Some leases include property tax expenses as part of CAM charges.

  Review Your Lease Agreement Carefully

  When leasing commercial space, it’s crucial for tenants to carefully review the lease agreement, especially the sections related to CAM fees. Tenants should understand how CAM charges are calculated, what expenses are included, and the frequency of CAM reconciliations.

  Negotiating CAM Charges

  During lease negotiations, tenants can often seek to limit the scope of CAM charges or cap the annual increase in CAM expenses. These negotiations can help provide cost predictability and protect tenants from unexpected cost escalations.

  CAM vs. Operating Expenses

  While CAM charges and operating expenses share similarities in that they both involve the upkeep of a commercial property, it’s essential to distinguish between the two:

  • CAM Charges: CAM charges are specifically associated with maintaining and operating common areas shared by multiple tenants within a commercial property. These expenses are typically billed separately from the base rent and are allocated among tenants based on their pro-rata share of the property’s total leasable space. CAM charges often cover items like property management, landscaping, janitorial services, utilities for common areas, and common area repairs.
  • Operating Expenses: Operating expenses, on the other hand, encompass the broader costs associated with running the entire commercial property, including both common areas and tenant-occupied spaces. These expenses may include property taxes, insurance premiums, building-wide utilities, structural repairs, and administrative costs related to the property’s overall operation. Unlike CAM charges, which are usually billed separately, operating expenses are often incorporated into the base rent or charged as a separate line item in the lease agreement.

  CAM Considerations in Lease Accounting:

  CAM charges play a significant role in lease accounting, particularly under ASC 842, which governs lease accounting for both lessees and lessors. CAM charges are a common component of commercial lease agreements and have specific accounting implications:

  • Lessee Recognition of CAM Expenses: Under ASC 842, lessees are required to recognize the total lease expense over the lease term on their balance sheet. This expense includes not only the base rent but also any additional payments, such as CAM charges.
  • Separate Identification of CAM Charges: Lessees must account for CAM charges separately from the base rent. They should record CAM charges as an expense when incurred, just like rent payments. This requires keeping a clear record of CAM expenses as they are invoiced or reconciled throughout the lease term.
  • Initial Recognition and Annual Reconciliation: Initially, CAM charges are estimated based on the lease agreement’s terms, and this estimate is included in the lessee’s total lease liability. However, CAM charges are subject to annual reconciliation. Lessees must adjust their liability and recognize any under- or overpayment of CAM charges in their financial statements based on actual expenses incurred.
  • Balance Sheet Impact: Including CAM charges on the balance sheet as part of the total lease liability affects a lessee’s financial ratios and metrics, such as leverage ratios and asset-to-liability ratios. This transparency provides a more accurate representation of the lessee’s financial obligations.
  • Income Statement Impact: CAM charges are recognized as expenses on the lessee’s income statement, impacting the lessee’s net income and other financial metrics.

  Armed with this knowledge, both landlords and tenants can navigate the realm of CAM charges with greater clarity and confidence. Whether you’re a property owner or a tenant, understanding CAM is paramount for making informed decisions and ensuring a harmonious and transparent landlord-tenant relationship in the world of commercial real estate leasing.
  

  The post Unraveling Common Area Maintenance (CAM) Charges: A Comprehensive Guide first appeared on Visual Lease.]]> https://visuallease.com/lease-clause-ideas-for-landlords-creating-the-best-lease-agreement/ Wed, 04 Oct 2023 13:00:35 +0000 https://visuallease.com/?p=8731 As a landlord, one of the most critical aspects of your rental property business is the lease agreement. A well-crafted lease agreement not only protects your interests but also provides...
  The post Lease Clause Ideas for Landlords: Creating the Best Lease Agreement first appeared on Visual Lease.]]> As a landlord, one of the most critical aspects of your rental property business is the lease agreement. A well-crafted lease agreement not only protects your interests but also provides clarity for both you and your tenants. In this blog post, we’ll explore essential lease clause ideas for landlords, aiming to help you create the best lease agreement possible. We’ll also discuss the key elements that should be included in your lease agreement to ensure a smooth and harmonious landlord-tenant relationship.
  1. Clearly Defined Lease Term Specify the lease term clearly in your agreement. Whether it’s a year-long lease or a month-to-month arrangement, outlining the duration of the lease provides both parties with a clear understanding of their commitment.
  2. Rent Amount and Due Date Clearly state the monthly rent amount and the due date. Make sure to include information about late fees and acceptable methods of payment.
  3. Security Deposit Details Outline the amount of the security deposit required, the conditions under which it may be withheld, and the timeline for returning the deposit after the lease ends.
  4. Maintenance and Repairs Specify the responsibilities of both the landlord and tenant when it comes to property maintenance and repairs. Define what constitutes normal wear and tear and what falls under the tenant’s responsibility.
  5. Property Access and Inspections Detail how and when you, as the landlord, can access the property for inspections, repairs, or other legitimate reasons. Ensure you adhere to local laws regarding notice periods for entry.
  6. Subletting and Assignment Determine whether subletting or assigning the lease is allowed. If not, make it clear that the tenant cannot transfer the lease to another party without your written consent.
  7. House Rules and Policies Include any specific house rules and policies, such as restrictions on smoking, pet policies, or noise regulations. Be sure to communicate any consequences for violating these rules.
  8. Utilities and Services Specify which utilities and services are included in the rent, and which are the tenant’s responsibility. This prevents confusion and disputes over utility payments.
  9. Maintenance of Landscaping If your property has a yard or landscaping, define whether the tenant is responsible for its upkeep or if you, as the landlord, will handle it.
  10. Notice Period for Lease Termination Clearly state the notice period required for either party to terminate the lease agreement. This helps prevent misunderstandings and ensures a smoother transition.
  11. Dispute Resolution Include a section on how disputes will be resolved, whether through mediation, arbitration, or the legal system. A clear dispute-resolution process can save both parties time and money.
  12. Renewal Procedures If you offer lease renewal options, outline the process for renewal, including any changes to rent or terms.
  13. Insurance Requirements Specify whether the tenant is required to maintain renters’ insurance and provide details on the coverage required.
  14. Guest Clauses Define rules regarding guests, such as the maximum length of time guests can stay, and whether overnight guests must be registered with the landlord.
  15. Fee Protection Clarify any fees associated with the lease, such as application fees or fees for bounced checks. State the purpose of these fees and the circumstances under which they may apply.
  16. Exit Inspection Include a provision for an exit inspection and walk-through when the lease ends. This helps document the condition of the property and any potential deductions from the security deposit.

  Creating the best lease agreement for landlords involves careful consideration of these essential lease clause ideas. A well-crafted lease agreement not only safeguards your interests but also promotes a positive landlord-tenant relationship. Remember that local laws and regulations may impact the specific language and clauses in your lease agreement. By prioritizing clarity and transparency in your lease agreements, you can set the stage for a successful and hassle-free rental experience for both you and your tenants.

  The post Lease Clause Ideas for Landlords: Creating the Best Lease Agreement first appeared on Visual Lease.]]> https://visuallease.com/navigating-nonprofits-asc-842-regulations-what-you-need-to-know/ Mon, 02 Oct 2023 13:00:50 +0000 https://visuallease.com/?p=8730 Much like their for-profit counterparts, nonprofits must also follow specific financial reporting standards, including Accounting Standards Codification (ASC) 842. This blog post will delve into the essential aspects of ASC...
  The post Navigating Nonprofits & ASC 842 Regulations: What You Need to Know first appeared on Visual Lease.]]> Much like their for-profit counterparts, nonprofits must also follow specific financial reporting standards, including Accounting Standards Codification (ASC) 842. This blog post will delve into the essential aspects of ASC 842 regulations and answer common queries like whether ASC 842 applies to nonprofits and when it becomes effective for compliance. Additionally, we will explore the world of Generally Accepted Accounting Principles (GAAP) applied in nonprofit accounting.

  Understanding ASC 842

  ASC 842 is a set of accounting standards developed by the Financial Accounting Standards Board (FASB). These standards specifically pertain to leases and were introduced to enhance transparency in lease accounting, providing a more accurate representation of an organization’s financial position. While ASC 842 is primarily associated with for-profit entities, it is important for nonprofits to understand its relevance as well.

  Does ASC 842 Apply to Nonprofit Organizations?

  The short answer is yes, ASC 842 does apply to nonprofit organizations. The FASB’s guidance on lease accounting, including ASC 842, is generally applicable to all entities that follow GAAP accounting standards. Therefore, nonprofits are not exempt from complying with ASC 842 when they enter into lease agreements.

  Nonprofit organizations often enter into leases for various assets, such as office spaces, vehicles, or equipment. These lease agreements can have a significant financial impact and should be accounted for in accordance with ASC 842.

  ASC 842 Effective Date for Nonprofit Organizations

  Understanding the effective date of ASC 842 compliance is crucial for nonprofit organizations. The FASB initially issued ASC 842 with staggered effective dates based on entity types. For public companies, the standard was effective starting in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Private companies and nonprofit organizations were granted more time to implement the standard.

  For nonprofit organizations, ASC 842 became effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. It’s essential to note that the effective dates might differ for certain nonprofit organizations based on their specific circumstances.

  GAAP Accounting for Nonprofits

  Nonprofit organizations, like for-profit entities, must adhere to Generally Accepted Accounting Principles (GAAP) when preparing their financial statements. ASC 842, being a part of GAAP, falls under these principles.

  GAAP accounting for nonprofits is designed to provide transparency and accuracy in financial reporting, ensuring that donors, grantors, and other stakeholders have a clear understanding of the organization’s financial health. Compliance with ASC 842 is crucial not only for meeting regulatory requirements but also for maintaining the trust of donors and supporters.

  H2: How to Nonprofits Can Prepare for ASC 842

  Nonprofit organizations can prepare for ASC 842 compliance by taking several proactive steps. Here are some key actions to consider:

  • Educate Your Team: Start by ensuring that your finance and accounting teams are well-informed about ASC 842 and its requirements. This may involve providing training or bringing in external experts to explain the nuances of the standard.
  • Identify Lease Agreements: Begin by identifying all lease agreements within your organization. This includes leases for office spaces, equipment, vehicles, or any other assets. It’s crucial to have a comprehensive list of all leases.
  • Gather Lease Data: Collect all relevant data related to your lease agreements. This includes lease terms, payment schedules, renewal options, and any other lease-specific information.
  • Assess Lease Classification: Determine whether each lease should be classified as an operating lease or a finance lease. ASC 842 requires different accounting treatments for each category.
  • Implement New Accounting Systems: You might need to update or implement new accounting systems to ensure they can handle the additional reporting requirements of ASC 842. Consider whether your existing software is capable of tracking and reporting lease data accurately.
  • Review Documentation: Ensure that your lease agreements and contracts are well-documented and readily accessible. Proper documentation is essential for compliance and financial reporting.
  • Engage Legal and Accounting Experts: Seek advice from legal and accounting professionals who are well-versed in ASC 842. They can help you interpret the standard and make informed decisions.
  • Develop New Policies and Procedures (Controls): Create policies and procedures that outline how your organization will handle lease accounting under ASC 842. This includes processes for initial recognition, subsequent measurement, and financial statement disclosure.
  • Consider Technology Solutions: Explore lease accounting software or technology solutions that can streamline the process of tracking and reporting lease data.
  • Perform Impact Assessment: Assess the financial impact of ASC 842 on your organization’s financial statements. This will help you understand how the standard will affect your balance sheet and income statement.
  • Communicate Changes: Ensure that relevant stakeholders, including board members, donors, and grantors, are aware of the changes brought about by ASC 842. Transparency is crucial in maintaining trust and support.
  • Testing and Validation: Before the compliance deadline, perform testing and validation of your lease accounting processes to identify any potential issues or discrepancies.
  • Stay Informed: Stay up-to-date with any updates or amendments to ASC 842. Accounting standards can evolve, so it’s essential to remain informed about changes that may affect your nonprofit.

  By proactively preparing for ASC 842 compliance, nonprofit organizations can ensure accurate financial reporting, maintain transparency, and meet regulatory requirements, ultimately safeguarding their financial stability and reputation.

  The post Navigating Nonprofits & ASC 842 Regulations: What You Need to Know first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-announces-2023-vl-customer-excellence-award-winners/ Wed, 27 Sep 2023 13:00:40 +0000 https://visuallease.com/?p=8715 Woodbridge, NJ – September 27, 2023 — Visual Lease (VL), the #1 lease optimization software provider, today announced the winners of its annual Customer Excellence Awards, recognizing organizations that are...
  The post Visual Lease Announces 2023 VL Customer Excellence Award Winners first appeared on Visual Lease.]]>

  Woodbridge, NJ – September 27, 2023 — Visual Lease (VL), the #1 lease optimization software provider, today announced the winners of its annual Customer Excellence Awards, recognizing organizations that are using VL’s platform to achieve optimal strategic financial and operational outcomes. The winners were unveiled at the company’s annual Customer Advisory Board (CAB) Summit, a multi-day event in San Antonio, TX, for select customers and partners.

  “This year’s recipients reflect how best-in-class companies are capitalizing on VL’s unique capabilities to streamline critical workflows, promote cross-departmental collaboration and ensure data accuracy,” said Robert Michlewicz, Visual Lease’s Chief Executive Officer. “With more than 1,500 global organizations leveraging VL’s platform to mitigate risks, create value and minimize costs associated with their lease records, these companies represent a valuable guidepost for our evolving industry.”

  This year’s VL Customer Excellence Award winners were recognized for:

  • Enhanced Controls: American Axle Manufacturing. A two-time VL Customer Excellence Award winner, American Axle Manufacturing extended its controls framework and audit-preparedness, resulting in an 85% reduction in its controls deficiencies.
  • Data-Driven Decisions: Compass. By merging its lease portfolio and business data into a proprietary visualization tool using the VL platform, the company now makes more strategic, data-driven decisions.
  • Unified Teams & Data: Quanta Services. By automating cross-departmental workflows, Quanta Services saved an impactful amount of time and money, allowing for a more collaborative and efficient workflow.
  • Driving Shared Success: RSM US LLP. VL’s partnership and shared mission with RSM assists a diverse and complex field of organizations seeking to implement processes and technologies which recognize risks and opportunities across a client’s lease portfolio.

  For other updates from VL, visit this link.

  About Visual Lease

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage more than 1 million real estate, equipment and other leased asset records globally. For more information, visit visuallease.com.

   

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 770 2270
  ebonavitacola@visuallease.com     

  The post Visual Lease Announces 2023 VL Customer Excellence Award Winners first appeared on Visual Lease.]]> https://visuallease.com/vl-esg-steward-named-a-sustainablitlity-product-of-the-year-by-the-business-intelligence-group/ Tue, 19 Sep 2023 13:00:13 +0000 https://visuallease.com/?p=8671 Woodbridge, NJ – September 19, 2023 — Visual Lease (VL), the #1 lease optimization software provider, today announced the company’s newest offering, VL ESG Steward™, has been recognized by the Business...
  The post VL ESG Steward™ Named a Sustainability Product of the Year by the Business Intelligence Group first appeared on Visual Lease.]]>

  Woodbridge, NJ – September 19, 2023 — Visual Lease (VL), the #1 lease optimization software provider, today announced the company’s newest offering, VL ESG Steward, has been recognized by the Business Intelligence Group as a winner of a 2023 Sustainability Award under the category of Sustainability Product of the Year. This recognition comes on the heels of VL being named a Leader in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Lease Accounting and Administration Applications 2023 Vendor Assessment (doc # US48562222, August 2023).

  “It is an honor to continue to receive industry recognition that not only celebrates VL’s foundation as a centralized system of record for all lease financial, operational and legal data, but also acknowledges our commitment to help organizations harness their portfolio to prepare for emerging business needs and compliance requirements,” said Robert Michlewicz, Visual Lease’s Chief Executive Officer. “VL ESG Steward is uniquely designed to help companies track and report on the environmental impact of their owned and leased assets in accordance with the sustainability disclosure requirements from The International Sustainability Standards Board (ISSB), IFRS S1 and IFRS S2.”

  The Visual Lease Data Institute (VLDI) has uncovered that 90% of organizations in the U.S. with more than 1,000 employees are looking to implement new sustainability goals over the next two to five years. VL ESG Steward is the first ESG reporting tool of its kind within the lease accounting and administration space specifically created to help organizations consolidate the records needed to track their environmental impact across their commercial real estate, fleet, equipment and more. With these insights in hand, businesses will be empowered to make better-informed decisions regarding how to reduce their carbon footprint in line with corporate goals and emerging global regulatory guidance.

  “Recent research from The VLDI has also shown that with the new lease accounting standards in effect and a rising interest in sustainability, 84% of companies have prioritized lease management,” said Amie Durr, Visual Lease’s Chief Product Officer. “While the majority of organizations are just now realizing how critical their lease portfolio is to their financial and operational success, this is not a new concept for VL. Our entire platform is built on 25+ years of experience maximizing the value customers receive from their lease portfolio.”

  The Sustainability Awards honor those who have made sustainability an integral part of their business practice. For-profit and not-for-profit organizations of all sizes submitted nominations, which were evaluated by business executives using the organization’s proprietary and unique scoring system. Other solutions recognized under the category of Sustainability Product of the Year include IBM Environmental Intelligence Suite: Renewables Forecasting, S&P Global Sustainable1 Nature & Biodiversity Risk Solution, and Honeywell Emissions Management Suite.

  To learn more about VL ESG Steward, please visit this link.

  For other updates from VL, visit this link.

  About Visual Lease

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records.

   

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 770 2270
  ebonavitacola@visuallease.com     

  The post VL ESG Steward™ Named a Sustainability Product of the Year by the Business Intelligence Group first appeared on Visual Lease.]]> https://www.corporatecomplianceinsights.com/lease-accounting-esg/ Mon, 18 Sep 2023 13:00:10 +0000 https://visuallease.com/?p=8678 Getting clear insight into sustainability metrics means understanding your company’s real estate footprint
  The post Article: What Does Lease Accounting Have to Do With ESG? first appeared on Visual Lease.]]> Getting clear insight into sustainability metrics means understanding your company’s real estate footprint
  The post Article: What Does Lease Accounting Have to Do With ESG? first appeared on Visual Lease.]]> https://visuallease.com/demystifying-non-lease-components-in-asc-842/ Tue, 12 Sep 2023 13:00:25 +0000 https://visuallease.com/?p=8651 Leasing arrangements are a common aspect of business operations, allowing companies to secure assets and facilities without the commitment of ownership. However, within the realm of lease accounting, there’s a...
  The post Demystifying Non-Lease Components in ASC 842 first appeared on Visual Lease.]]> Leasing arrangements are a common aspect of business operations, allowing companies to secure assets and facilities without the commitment of ownership. However, within the realm of lease accounting, there’s a concept that often adds complexity to the equation: non-lease components. In this article, we’ll delve into what non-lease components are, their significance under ASC 842, and how they impact lease accounting.

  Understanding Non-Lease Components

  When discussing lease payments, we encounter three distinct categories that play a role in determining financial obligations:

  1. Lease Payments: These are relatively straightforward. Lease payments encompass the base rent or any other charges that contribute to calculating the ending liability. This liability, in turn, plays a pivotal role in the calculation of the right-of-use asset.
  2. Excluded Payments: Excluded payments, as the name suggests, are those that do not factor into accounting schedules. They have no bearing on the lease accounting process. Examples include real estate taxes, utility payments, and direct payments to other vendors that are unrelated to the lease.
  3. Non-Lease Components: Non-lease components are the focus of our discussion. These payments are intricately tied to the lease but are excluded from the definition and calculation of the right-of-use liability. These components arise from the lease agreement but are not integrated into the accounting framework in the same manner as lease payments.

  What are Non-Lease Components in ASC 842?

  Under the guidelines of ASC 842, non-lease components hold a unique position. They are payments made to the lessor that stem from the lease agreement but are treated differently in the accounting process. Examples of non-lease components commonly encountered include Common Area Maintenance (CAM) charges, operating expenses, and other variable expenses that are linked to the occupancy of the premises.

  Importantly, non-lease components are disclosed in financial statements and IASB disclosure reports, adding transparency to the financial picture. However, their treatment differs from lease payments. Unlike lease payments, non-lease components are expensed in the period they are paid. This distinction is crucial, as it means they do not contribute to the amortization schedule or impact the calculation of the right-of-use asset.

  Non-Lease Components Significance and Implications

  Understanding non-lease components is essential for accurate financial reporting and compliance with lease accounting standards. By recognizing these components and differentiating them from lease payments, companies can ensure that their financial statements are transparent, accurate, and compliant with ASC 842.

  In the complex landscape of lease accounting, grasping the intricacies of non-lease components is crucial. These components, distinct from lease payments and excluded payments, contribute to a comprehensive understanding of a company’s financial obligations. As outlined by ASC 842, non-lease components are payments tied to the lease but treated separately in accounting processes. Their disclosure is mandatory, but their treatment as expenses in the period paid sets them apart from lease payments.

  By familiarizing yourself with non-lease components, you can navigate the world of lease accounting more confidently.  If you’re looking to streamline lease management, ensure compliance with accounting standards, and gain full visibility into your lease portfolio, check out VL’s Lease Accounting platform.

  The post Demystifying Non-Lease Components in ASC 842 first appeared on Visual Lease.]]> https://visuallease.com/how-to-calculate-a-lease-amortization-schedule-a-comprehensive-guide/ Thu, 07 Sep 2023 13:00:58 +0000 https://visuallease.com/?p=8650 When it comes to managing leases and financial obligations, understanding how to calculate a lease amortization schedule is crucial. This schedule not only helps you keep track of payment timing...
  The post How to Calculate a Lease Amortization Schedule: A Comprehensive Guide first appeared on Visual Lease.]]> When it comes to managing leases and financial obligations, understanding how to calculate a lease amortization schedule is crucial. This schedule not only helps you keep track of payment timing but also ensures accurate financial reporting and compliance. In this guide, we’ll walk you through the process of creating a lease amortization schedule step by step, using Excel as a powerful tool. Whether you’re a business owner, accountant, or financial analyst, mastering this skill can greatly enhance your financial management capabilities.

  Understanding Lease Amortization Schedule

  A lease amortization schedule is designed to outline the timing of lease payments and allocate them between principal and interest components. This schedule reflects the gradual reduction of the lease liability balance over time. The fundamental idea is to break down the net present value of all future lease payments into manageable installments. By doing so, you gain clarity into the distribution of costs and can make informed financial decisions.

  Creating a Lease Amortization Schedule

  To begin, let’s explore how to construct a lease amortization schedule:

  1. Gather Information: Collect essential lease details, including the number of payments, payment amounts, lease term, and discount rate.
  2. Choose Payment Timing: Determine whether payments are made at the beginning or end of each period. This choice will influence your calculation methodology.
  3. Calculate Beginning Liability Balance: Calculate the net present value of all remaining future payments. This value serves as your beginning liability balance.
  4. Set Up Amortization Schedule: Create a table with columns for Period, Beginning Balance, Interest Expense, Principal Payment, Cash Payment, and Ending Balance.
  5. Fill in Period Numbers: Start with period 1 and proceed to the lease term’s final period.
  6. Calculate Interest Expense: Based on your chosen payment timing, calculate the interest expense for each period. For beginning-of-period payments, apply the interest rate to the previous period’s ending balance. For end-of-period payments, apply the interest rate to the beginning balance.
  7. Calculate Principal Payment: Subtract the interest expense from the cash payment to determine the principal payment.
  8. Calculate Ending Balance: Deduct the principal payment from the beginning balance to get the ending balance for the current period.
  9. Repeat the Process: Continue these calculations for each period until the lease term is complete.
  10. Visualize the Data: Create a line chart to visualize the gradual reduction of the lease liability balance over time.

  Benefits of Using a Lease Amortization Schedule

  Creating a lease amortization schedule offers several benefits for businesses and individuals alike:

  • Financial Planning: The schedule provides a clear overview of payment distribution, helping you plan your finances effectively.
  • Accurate Reporting: An accurate schedule aids in preparing financial statements and adhering to accounting standards such as ASC 842 and IFRS 16.
  • Compliance: For businesses, compliance with lease accounting standards is essential. A well-constructed schedule ensures you stay compliant with regulations.
  • Informed Decisions: By understanding how payments are allocated between interest and principal, you can make informed decisions about leasing arrangements.

  Using Lease Amortization Schedule Calculators and Templates

  For those looking to simplify the process, various online lease amortization schedule calculators are available. These tools allow you to input lease details and receive a ready-made schedule.

  In conclusion, understanding how to calculate a lease amortization schedule is a valuable skill that enhances financial management and decision-making. By leveraging tools, you can create accurate schedules that provide insights into lease payment timing and distribution. Whether you’re a business professional or an individual managing personal leases, this knowledge empowers you to take control of your financial obligations.

  Remember, consistency in methodology is key, regardless of whether you choose beginning-of-period or end-of-period calculations. By mastering lease amortization schedules, you’ll be well-equipped to navigate the complexities of lease accounting and financial management.

  Looking for a tool to manage your lease accounting needs? Easily manage every modification and maintain compliance as your leases – and the regulatory requirements – evolve with VL’s Lease Accounting platform.

  The post How to Calculate a Lease Amortization Schedule: A Comprehensive Guide first appeared on Visual Lease.]]> https://visuallease.com/unveiling-the-net-advantage-to-leasing-understanding-the-lease-vs-buy-analysis/ Tue, 05 Sep 2023 13:00:41 +0000 https://visuallease.com/?p=8649 In the realm of business decisions, the choice between leasing and buying assets has significant financial implications. To help evaluate these options, the concept of “Net Advantage to Leasing” comes...
  The post Unveiling the Net Advantage to Leasing: Understanding the Lease vs. Buy Analysis first appeared on Visual Lease.]]> In the realm of business decisions, the choice between leasing and buying assets has significant financial implications. To help evaluate these options, the concept of “Net Advantage to Leasing” comes into play. In this article, we’ll delve into what the net advantage to leasing entails, how to calculate it, and why it’s an integral part of informed decision-making.

  Defining Net Advantage to Leasing

  The term “Net Advantage to Leasing” might seem like a mouthful, but it essentially encapsulates the financial evaluation of the advantages associated with leasing as opposed to buying an asset outright. While the terminology leans towards leasing, the concept is often referred to as a “lease vs. buy analysis.” This analysis seeks to determine whether leasing or purchasing is the more financially advantageous option based on various factors.

  The Complexity of Lease vs. Buy Analysis

  A universal formula for a lease vs. buy analysis doesn’t exist due to the diverse factors that come into play. The analysis involves weighing the cumulative payments required for leasing an asset against the total expenses involved in purchasing and owning it. The result of this analysis provides insight into which option aligns better with a company’s financial goals.

  Calculating the Net Advantage to Leasing

  To calculate the net advantage to leasing, consider the following steps:

  1. Identify Costs: Sum up all the payments expected for leasing an asset, including any maintenance or operating expenses. Similarly, calculate the costs associated with purchasing and owning the asset, such as the purchase price, maintenance, and disposal costs.
  2. Time Value of Money: Recognize the importance of the time value of money. Money available today holds more value than the same amount in the future. This means that upfront costs have a different impact compared to future costs.
  3. Duration Matters: Consider the duration for which you’re analyzing the lease vs. buy decision. The financial picture can change significantly depending on the period you’re evaluating.
  4. Present Value: Apply the concept of present value to both leasing and buying costs. This involves discounting future cash flows back to their present value to account for the time value of money.
  5. Compare: Compare the present value of total expenses for leasing and buying. This analysis helps you understand the financial advantages or disadvantages of each option.

  Grasping the Concept Through an Example

  Let’s consider an example involving a vehicle. If you’re looking to acquire a car, the lease option might appear attractive due to lower upfront costs and the absence of a significant down payment. However, the lease might come with a lump sum payment at the end. Analyzing the total expenditures and applying the time value of money clarifies the financial implications of both options.

  The net advantage to leasing, or the lease vs. buy analysis, is an indispensable tool for making informed financial decisions. While there’s no one-size-fits-all formula, understanding the components involved—total expenses, time value of money, and present value—can guide you toward choosing the option that aligns best with your company’s financial strategy.

  If you’re looking for a platform that can aid your organization in finding insights across your leases, check out VL’s Lease Accounting solution.

  The post Unveiling the Net Advantage to Leasing: Understanding the Lease vs. Buy Analysis first appeared on Visual Lease.]]> https://visuallease.com/lessee-vs-tenant-demystifying-the-difference/ Thu, 31 Aug 2023 13:00:10 +0000 https://visuallease.com/?p=8648 When it comes to real estate and leasing agreements, terms can sometimes get a bit muddled. One such pair of terms that often find themselves used interchangeably are “lessee” and...
  The post Lessee vs. Tenant: Demystifying the Difference first appeared on Visual Lease.]]> When it comes to real estate and leasing agreements, terms can sometimes get a bit muddled. One such pair of terms that often find themselves used interchangeably are “lessee” and “tenant.” However, there’s a subtle distinction between the two, and understanding this difference can help clarify legal and financial matters. In this article, we’ll break down the nuances of lessee vs. tenant and shed light on their implications.

  Defining Lessee vs. Tenant

  At first glance, “lessee” and “tenant” might seem like synonyms, and in many cases, they are used that way. But when we dig deeper, a distinction becomes evident.

  • Lessee: A lessee is a term that refers to an individual or entity that has entered into a formal lease agreement. This agreement outlines the terms and conditions under which the lessee gains the right to use and occupy a property. The lessee pays a specified amount of money at predetermined intervals for the privilege of utilizing the premises.
  • Tenant: A tenant, on the other hand, is someone who occupies a property, regardless of whether there is a formal lease agreement in place. This occupancy can be under various arrangements, such as month-to-month agreements or even informal arrangements. While a tenant might have a lease, they can also be occupying the space without a legally binding lease.

  Understanding the Role of Lease Agreements

  The crux of the difference between a lessee and a tenant lies in the presence of a lease agreement. A lease agreement is a legal document that outlines the terms, rights, and obligations of both parties—the lessor (property owner) and the lessee. The agreement specifies the duration of the lease, rent payment details, and any additional clauses that govern the arrangement.

  In contrast, a tenant might occupy a property without a formal lease agreement. This could be due to a short-term arrangement, an informal understanding, or even a month-to-month occupancy.

  Accounting and Business Perspective

  From an accounting standpoint, the distinction between a lessee and a tenant might not carry as much weight. The financial responsibilities and considerations for both parties, especially in a business context, can be quite similar. The primary difference in treatment often depends on the presence or absence of a formal lease agreement.

  Interchangeability in Everyday Language

  In everyday conversations, “lessee” and “tenant” are often used interchangeably, and in many scenarios, this casual usage is perfectly acceptable. However, when it comes to legal and financial matters, understanding the precise terms can help prevent misunderstandings and ensure that the proper legal protections are in place.

  In the world of real estate and leasing, language matters. While “lessee” and “tenant” might be used interchangeably in everyday language, they carry subtle distinctions in the legal and financial realms. A lessee is someone who enters into a formal lease agreement, while a tenant refers to someone occupying a property, regardless of the presence of a lease. By grasping these nuances, you can navigate lease-related matters with confidence and clarity.

  Are you ready to simplify your lease management and ensure accurate documentation of lease agreements? Explore Visual Lease’s comprehensive platform that empowers businesses to streamline lease tracking, stay compliant, and make informed financial decisions. Request a demo today.

  The post Lessee vs. Tenant: Demystifying the Difference first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-named-a-leader-in-idc-marketscape-report-on-lease-accounting-administration-software/ Tue, 29 Aug 2023 13:15:49 +0000 https://visuallease.com/?p=8642 Company’s proven SaaS solutions are recognized in first analyst report dedicated to full lease portfolio management Woodbridge, NJ – August 29, 2023 — Visual Lease (VL), the #1 lease optimization...
  The post Visual Lease Named a Leader in IDC MarketScape Report on Lease Accounting & Administration Software first appeared on Visual Lease.]]> Company’s proven SaaS solutions are recognized in first analyst report
  dedicated to full lease portfolio management

  Woodbridge, NJ – August 29, 2023 — Visual Lease (VL), the #1 lease optimization software provider, today announced that it has been named a Leader in the IDC MarketScape: Worldwide SaaS and Cloud-Enabled Lease Accounting and Administration Applications 2023 Vendor Assessment (doc # US48562222, August 2023). 

  The IDC MarketScape is the first analyst report to provide a comprehensive evaluation of the combined lease accounting and lease administration capabilities of more than a dozen software providers. Over the last two years, IDC cross-compared the product strategies and capabilities of the vendors in this space through multiple system demos, customer references and surveys designed to collect details on platform functionality, roadmap, integrations, security and global use.

  “Being named a Leader in this inaugural report reinforces our belief that when prioritized, lease record data has the potential to contribute significant strategic value to a business that extends far beyond meeting compliance requirements,” said Visual Lease’s CEO, Robert Michlewicz. “Informed by more than two decades of lease portfolio management experience, Visual Lease is the only solution that provides organizations with the visibility and controls needed to mitigate risk, optimize value and minimize cost – all critical capabilities in today’s market.”

  The IDC MarketScape: Worldwide SaaS and Cloud-Enabled Lease Accounting and Administration Applications 2023 Vendor Assessment notes, “Consider Visual Lease if you are looking for an end-to-end solution that leverages 25+ years of experience maximizing the value customers receive from their lease portfolio by ensuring they have strong, sustainable financial and operational controls and comprehensive reporting capabilities.”

  “Serving as a centralized system of record for all lease financial, operational and legal data, Visual Lease provides organizations the opportunity to sustain lease accounting compliance and simultaneously leverage their leases for strategic financial and operational outcomes,” said Kevin Permenter, Research Director at IDC. “Based on our analysis, VL offers substantial platform extension capabilities around tracking and reporting on the environmental impact of leased and owned assets to support their clients’ ESG initiatives. The platform is well positioned to help organizations harness the power of their portfolio to enhance business resiliency.”

  To date, in 2023, Visual Lease has earned 12 Leader badges on G2, including Leader status for Enterprise businesses in both the Lease Administration and Lease Accounting categories for every consecutive quarter, as well as Leader status in both categories for businesses of all sizes. VL was also named a High-Performing Solution for Asset Management and Lease Management for small businesses. Most recently, Visual Lease was recognized as a finalist in the category of Best SaaS Product in CSR, Sustainability and ESG by the Software as a Service Awards.

  To access a copy of the report, visit this page.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About IDC MarketScape
  IDC MarketScape vendor assessment model is designed to provide an overview of the competitive fitness of ICT (information and communications technology) suppliers in a given market. The research methodology utilizes a rigorous scoring methodology based on both qualitative and quantitative criteria that results in a single graphical illustration of each vendor’s position within a given market. IDC MarketScape provides a clear framework in which the product and service offerings, capabilities and strategies, and current and future market success factors of IT and telecommunications vendors can be meaningfully compared. The framework also provides technology buyers with a 360-degree assessment of the strengths and weaknesses of current and prospective vendors.

  About Visual Lease
  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.

   

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 770 2270
  ebonavitacola@visuallease.com     

  The post Visual Lease Named a Leader in IDC MarketScape Report on Lease Accounting & Administration Software first appeared on Visual Lease.]]> https://visuallease.com/understanding-lease-purchase-accounting-and-implications/ Thu, 24 Aug 2023 13:00:07 +0000 https://visuallease.com/?p=8572 Leasing is a common practice in business, allowing companies to acquire assets without a hefty upfront cost. However, situations arise where a lessee wants to transition from leasing to outright...
  The post Understanding Lease Purchase: Accounting and Implications first appeared on Visual Lease.]]> Leasing is a common practice in business, allowing companies to acquire assets without a hefty upfront cost. However, situations arise where a lessee wants to transition from leasing to outright ownership, leading to a “lease purchase” scenario. 

  In this blog post, we’ll delve into what a lease purchase option entails, its accounting nuances, and the tax implications that come with it.

  What is a Lease Purchase Option?

  Before diving into the accounting and tax considerations, let’s clarify what a lease purchase option is. A lease purchase option gives a lessee the right, but not the obligation, to buy the leased asset from the lessor. This option can be exercised at a predetermined price, often referred to as the “purchase option price,” which could be a nominal amount or a percentage of the asset’s market value.

  Accounting for Lease Purchase:

  1. Lease Purchase Out of a Lease: If a lessee decides to purchase an asset they were previously leasing, and the lessor agrees, it’s a straightforward transition. There’s no need for advanced accounting; the asset shifts from being a leased asset to a fixed asset on the books. The accumulated amortization shifts to fixed asset depreciation, and any associated taxes are factored in. Essentially, it’s treated like any other purchase.
  2. Lease Purchase Option: When the lessee holds a purchase option, the accounting approach hinges on their intent to exercise it. If the lessee doesn’t anticipate exercising the option, the lease is accounted for as a regular lease. However, if the lessee intends to exercise the option, a different accounting schedule is crafted based on that impending purchase.

  Lease Classification Test:

  For the lease classification test, the timing of asset ownership transfer becomes vital. If it’s likely that ownership will transfer at the option’s exercise, the underlying asset isn’t amortized over the lease term but over the asset’s useful life.

  Lease Purchase Tax Implications:

  The tax implications can be substantial when considering a lease purchase option. If you account for the asset as likely to be purchased at the lease term’s midpoint or end, you amortize the asset value over its useful life. For example, if the leased asset is a vehicle with an 8-year useful life, your amortization occurs over 8 years, impacting expense profiles.

  Bargain Purchase Option:

  A “bargain purchase option” presents another dimension. This means there’s a compelling economic incentive to exercise the option due to a nominal or low purchase price. Even if the lessee initially doesn’t intend to exercise the option, accounting assumes that they will due to the economic incentive.

  Changing Intent and Remeasuring:

  If intent changes—say, from planning to exercise the option to not exercising it—the lease is remeasured. This might change the lease classification, switching from finance to operating lease treatment.

  In conclusion, a lease purchase option introduces complexities to accounting and tax implications. Your approach depends on your intent to exercise the option, the asset’s useful life, and potential bargain purchase incentives. Consulting with accounting professionals can provide clarity and ensure compliance with accounting standards and tax regulations. Understanding the intricacies of lease purchase options empowers businesses to make informed decisions about their assets and financial strategy.

  The post Understanding Lease Purchase: Accounting and Implications first appeared on Visual Lease.]]> https://visuallease.com/preparing-for-lease-accounting-audits-your-comprehensive-checklist/ Wed, 23 Aug 2023 13:00:06 +0000 https://visuallease.com/?p=8571 As a company navigating the intricacies of lease accounting, you’re no stranger to the importance of maintaining accuracy and compliance. Part of this process involves undergoing lease audits, a task...
  The post Preparing for Lease Accounting Audits: Your Comprehensive Checklist first appeared on Visual Lease.]]> As a company navigating the intricacies of lease accounting, you’re no stranger to the importance of maintaining accuracy and compliance. Part of this process involves undergoing lease audits, a task that might seem daunting but is an integral part of your financial health. In this blog post, we’ll guide you through preparing for a lease accounting audit using a detailed checklist to streamline the process and ensure a smooth audit experience.

  Understanding the Significance of Lease Audits:

  Before diving into the checklist, let’s briefly discuss why lease audits are crucial. A lease audit is not just about verifying numerical accuracy; it’s a comprehensive evaluation of your lease agreements, expenditures, controls, and compliance measures. Auditors assess whether your financial transactions align with the terms of your leases and identify any potential risks of fraud or mismanagement.

  Lease Audit Checklist:

  1. Set Clear Boundaries: Determine which leases are subject to the audit. This ensures that your audit scope is defined and complete.
  2. Gather Complete Information: Compile all relevant information, including lease abstracts and underlying lease documents. Auditors need to verify that you’re adhering to lease terms and performing as required.
  3. Ensure Up-to-Date Lease Data: Leases evolve over time, so ensure your data is current. Auditors will review your most recent lease information to verify accuracy.
  4. Review Payment Processes and Controls: Examine your payment processes and controls. This involves ensuring that your payment methods align with lease terms and that you’re accurately disbursing funds.
  5. Document Expenditures: Document and maintain supporting documentation for all expenditures. This documentation might include lease schedules, invoices, and any variable payment calculations.
  6. Validate CAM Charges: If you’re responsible for common area maintenance (CAM) charges, ensure that these charges are reconciled against actual expenses. Validate supporting documentation to prevent overcharges.
  7. Track Capital Expenditures: Properly depreciate capital expenditures as per lease requirements. Ensure that these expenditures are accounted for accurately.
  8. Verify CPI Increases: If your lease involves Consumer Price Index (CPI) increases, verify that these calculations are accurate and performed at the appropriate times.
  9. Check Percentage-Based Payments: If your payments are based on a percentage of sales, validate reported sales numbers, exclusions, and calculations.
  10. Ensure Compliance for Financial Statements: Review your compliance procedures for submitting financial statements and any contingent obligations outlined in your lease. Ensure all documentation aligns.
  11. Review Contingent Payments: Scrutinize any contingent payments mentioned in the lease agreement. Verify that these contingencies are appropriately met before payments are made.
  12. Validate Controls: Assess your internal controls for their effectiveness in preventing fraud and ensuring accurate financial reporting.
  13. Audit the Full Scope: Remember that an audit goes beyond mathematical accuracy. It involves validating documentation, controls, and compliance measures.

  Benefits of Lease Accounting Audit Preparation:

  A well-prepared audit expedites the process and instills confidence in auditors and stakeholders. Properly documenting your lease transactions, ensuring compliance, and validating payments demonstrate your commitment to transparency and accuracy.

  While lease audits might seem like a complex ordeal, proper preparation simplifies the process. Use our comprehensive lease audit checklist as a guide to ensure that your lease accounting audit is efficient, effective, and successful. By proactively addressing potential issues and maintaining impeccable records, you’re well on your way to navigating lease audits with confidence and ease.

  The post Preparing for Lease Accounting Audits: Your Comprehensive Checklist first appeared on Visual Lease.]]> https://visuallease.com/navigating-commercial-lease-lifecycles-a-holistic-perspective/ Mon, 21 Aug 2023 13:00:40 +0000 https://visuallease.com/?p=8570 The realm of commercial leases encompasses a complex lifecycle that spans far beyond the mere agreement itself. While it’s a subject that often invites surface-level discussions, grasping the full scope...
  The post Navigating Commercial Lease Lifecycles: A Holistic Perspective first appeared on Visual Lease.]]> The realm of commercial leases encompasses a complex lifecycle that spans far beyond the mere agreement itself. While it’s a subject that often invites surface-level discussions, grasping the full scope of a commercial lease lifecycle is essential for businesses and professionals to make informed decisions. In this article, we’ll unveil the multifaceted stages of a commercial lease lifecycle, debunking myths and providing valuable insights.

  Seeing the Whole Elephant: A Holistic Approach to Commercial Lease Lifecycles

  The tale of the blind men describing an elephant aptly mirrors the way various stakeholders perceive commercial leases. Administrators, accountants, brokers, and tenants all interact with leases from their vantage points, often missing the broader picture. To truly understand the commercial lease lifecycle, we need to step back and observe its phases cohesively.

  1. Acquisition Phase: Finding the Right Fit The lifecycle commences with the acquisition phase. This is where the organization identifies the need for a leased asset. Whether it’s real estate or equipment, the acquisition phase involves sourcing the asset, potentially through brokers or procurement departments. The asset is brought into the organization, setting the stage for the next phase.
  2. Preparation Phase: Ready for Action Once the asset is acquired, the preparation phase begins. In the context of real estate leases, this phase includes tenant improvements and fitting out the premises for operational use. Accounting teams get involved to set up proper accounting structures and recognize tenant improvement work. Preparing the asset is essential before actual occupancy.
  3. Operational Phase: Utilizing the Asset As operations commence, the lease enters the operational phase. The asset is used for business activities, with facilities management teams handling maintenance and upkeep. The accounting team oversees accurate expense recognition, aligning with lease terms. Periodic reviews ensure the asset’s continued value to the organization.
  4. Transition Phase: Assessing the Need Transitioning towards the end of the lease term, companies reassess the asset’s value and necessity. This phase isn’t solely reserved for lease-end. Companies may review their asset needs at various points throughout the lease term, deciding whether to continue or relocate.
  5. Disposition Phase: Wrapping Up As the lease term nears its end, the disposition phase comes into play. Operations wind down, equipment is relocated, and furniture is dismantled. If required, restoration work is performed on the premises before returning them to the lessor. Ultimately, the keys are handed back, concluding the operational phase.

  Accounting for the Complete Picture

  Throughout the entire lifecycle, accounting plays a crucial role. From setting up proper accounting structures for leases and tenant improvement expenses to tracking operating expenses and reconciling financials, the accounting team ensures accurate financial reporting.

  Why Understanding the Lifecycle Matters

  Understanding the comprehensive lifecycle of commercial leases empowers businesses to make strategic decisions. Whether it’s renewing a lease, reevaluating the asset’s value, or orchestrating a smooth transition, each phase informs a company’s trajectory.

  Conclusion: Embracing the Full Journey

  Beyond the lease agreement lies a dynamic and multifaceted lifecycle. Embracing the entire journey ensures that businesses operate efficiently, accounting accurately reflects transactions, and decision-making remains informed. By understanding the stages from acquisition to disposition, professionals can navigate commercial lease lifecycles with a holistic perspective, reaping the benefits of well-informed choices and optimal financial management.

  The post Navigating Commercial Lease Lifecycles: A Holistic Perspective first appeared on Visual Lease.]]> https://visuallease.com/asset-capitalization-in-lease-accounting-what-you-need-to-know/ Thu, 17 Aug 2023 13:00:20 +0000 https://visuallease.com/?p=8569 Navigating the world of lease accounting can sometimes feel like deciphering a complex code. The terms, regulations, and methodologies can leave even the savviest professionals scratching their heads. One such...
  The post Asset Capitalization in Lease Accounting: What You Need to Know first appeared on Visual Lease.]]> Navigating the world of lease accounting can sometimes feel like deciphering a complex code. The terms, regulations, and methodologies can leave even the savviest professionals scratching their heads. One such topic that often raises questions is asset capitalization in leases. In this article, we’ll delve into the intricacies of this concept, clarifying what it means to capitalize an asset, and shedding light on the impact it has on your balance sheet.

  The Evolution of Lease Accounting

  Before we dive into the details of asset capitalization, let’s address an important shift in lease accounting. The term “capital lease” under the old ASC 840 standard has become a relic of the past. With the advent of ASC 842 guidelines, leases are now classified into two categories: operating leases and finance leases. While the term “capital lease” has been retired, the concept of capitalizing assets remains a fundamental aspect of lease accounting.

  What Does It Mean to Capitalize an Asset?

  To capitalize an asset means to recognize it on your balance sheet as both an asset and a corresponding liability. In the context of lease accounting, this occurs when a lease, whether an operating or finance lease, is brought onto the balance sheet. The asset value represents the right to use the leased asset over the lease term, while the liability reflects the future payment obligations associated with the lease.

  Capitalized Assets Based on the Lease Classification

  Regardless of lease type, all leased assets are capitalized under ASC 842 guidelines. However, the treatment of these capitalized assets varies based on the lease classification.

  1. Operating Leases: In an operating lease, the expense recognition is characterized by straight-line rent expense. This means that the total lease payments are divided equally over the lease term. The amortization of the right-of-use asset is calculated based on an interest component derived from the remaining liability balance.
  2. Finance Leases: Finance leases, on the other hand, are recognized with a front-loaded expense recognition. The amortization of the right-of-use asset follows a straight-line method, while the interest component varies as the liability balance decreases over time.

  Calculating Asset Capitalization

  As the intricacies of calculating asset capitalization and amortization become evident, it’s clear that the assistance of specialized software is invaluable. Solutions like Visual Lease offer the functionality to streamline these calculations, ensuring accuracy and compliance. With pre-set formulas and automation capabilities, lease management software simplifies the process, allowing you to focus on strategic decision-making rather than complex calculations.

  A Clearer Path to Lease Accounting Clarity

  While the terminology of lease accounting may have evolved, the concept of asset capitalization remains at its core. Recognizing leased assets on the balance sheet, along with the corresponding liabilities, is a critical step in achieving accurate financial reporting and compliance. Whether dealing with operating or finance leases, understanding the nuances of asset capitalization ensures that your organization remains on the path of accurate and transparent lease accounting practices. And with the support of advanced lease management software, you can navigate these complexities with confidence and clarity.

  The post Asset Capitalization in Lease Accounting: What You Need to Know first appeared on Visual Lease.]]> https://visuallease.com/financial-restatements-the-impact-to-newly-public-companies/ Tue, 15 Aug 2023 13:00:43 +0000 https://visuallease.com/?p=8562 Navigating the Transition: Understanding Challenges Faced by Newly Public Companies and Strategies for Success In the dynamic landscape of public offerings, the surge in initial public offerings (IPOs) during 2020...
  The post ​​Financial Restatements: The Impact to Newly Public Companies first appeared on Visual Lease.]]> Navigating the Transition: Understanding Challenges Faced by Newly Public Companies and Strategies for Success

  In the dynamic landscape of public offerings, the surge in initial public offerings (IPOs) during 2020 and 2021 led to a record number of companies going public through traditional IPOs or SPAC mergers. However, the parallel rise in IPOs and accounting restatements offers a significant insight into the challenges new public companies face. These companies, while transitioning to public status, are often still fine-tuning their internal controls, accounting policies, team structure, and technology integration. This leaves them susceptible to internal control weaknesses, restatements, and the need for remediations.

  What Is a Restatement?

  A restatement is the rectification of previously released financial statements, prompted by errors or misinterpretations. This commonly happens during the transition of newly public firms. Such revisions entail correcting mistakes, including significant inaccuracies, stemming from sources like accounting errors, noncompliance with GAAP, fraud, or clerical blunders. Accountants assess materiality, and if flawed data could result in misleading interpretations, restatements become obligatory under FASB rules. 

  A Deeper Dive into Restatements

  A survey conducted in 2022 by Deloitte highlighted that approximately 59.1% of public companies revised or remediated their financial processes within the past 12 months, with 51.6% anticipating the same within the next year. Delving deeper into newly public companies that encountered restatements, Deloitte’s discussions with CFOs revealed three recurring themes contributing to these events:

  • Complex Accounting Standards: The transition to newly applicable accounting standards often requires more judgment and estimates. These intricate standards can challenge companies, leading to restatements.
  • Manual Processes and Controls: The process of refining internal controls, often through manual processes and multiple spreadsheets, can create an environment prone to errors.
  • Lack of Specialized Skills: New public companies might lack staff with deep technical expertise in these evolving standards, increasing the likelihood of misinterpretations and errors.

  Areas of Common Restatements

  Based on Securities and Exchange Commission (SEC) filings, one of the most common areas for restatements in newly public companies since is leases (ASC 842). The nuances and complexities within ASC 842 often require technical accounting expertise and pose challenges for newly public entities.

  Responding to Restatements

  Responding to restatements requires a methodical approach:

  1. Create a Plan: Establish a project management office (PMO) with clear protocols, resources, and communication channels to address the issue.
  2. Assess Resources: Enlist resources with deep technical knowledge to address the complexities causing restatements.
  3. Evaluate Misstatements: Investigate the cause of the misstatement and adjust financials accordingly.
  4. Identify Control Failures: Understand the root cause of internal control deficiencies and prepare a remediation plan.
  5. Communication: Keep stakeholders informed, including auditors, board of directors, investors, regulators, and banks.
  6. Complete Reporting: Prepare restated financials and disclosures to explain the misstatement’s cause and impact.
  7. Repair and Improve: Use the lessons learned to enhance controls and processes, minimizing the risk of future restatements.

  Preventing Future Restatements

  Preventing future restatements involves building a resilient accounting organization:

  • Continuous Controls Assessment: Regularly assess internal controls to adapt to changing business conditions and technology.
  • Stay Current: Monitor regulatory changes that might affect accounting and financial reporting.
  • Leverage External Advisers: Engage accounting and reporting advisers with specialized skills to analyze complex issues and offer solutions.

  With the intricate landscape of accounting standards and the unique challenges that newly public companies face, establishing a knowledgeable team, strong controls framework, and proactive remediation strategy can significantly reduce the risk of restatements and ensure a smooth transition into the public market. 

  The post ​​Financial Restatements: The Impact to Newly Public Companies first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-appoints-gene-cook-as-vice-president-of-global-partners/ Tue, 08 Aug 2023 13:20:39 +0000 https://visuallease.com/?p=8559 Company invests in its Partner network in preparation for the next stage of growth Woodbridge, NJ – August 8, 2023 — Visual Lease (VL), the #1 lease optimization software provider,...
  The post Visual Lease Appoints Gene Cook as Vice President of Global Partners first appeared on Visual Lease.]]>

  Company invests in its Partner network in preparation for the next stage of growth

  Woodbridge, NJ – August 8, 2023 — Visual Lease (VL), the #1 lease optimization software provider, today announced the appointment of Gene Cook as its first Vice President of Global Partners. In his new role, Cook will help VL expand the value it provides to its growing network of Global Partners across leading accounting firms, professional services organizations, commercial real estate firms and solution providers.

  “It’s a pleasure to welcome Gene to our leadership team as we take the VL Global Partner program into the next phase of its evolution,” said Visual Lease CEO, Robert Michlewicz. “VL has an active and growing partner network because the platform makes it easy for cross-functional teams to track and report on dynamic datasets, ensuring accuracy and timely access to critical information while also reducing risk and improving business agility. With Gene’s background and experience, we look forward to collaborating with new and existing partners to offer mutual clients best-in-class software and services, empowering them to deliver better strategic financial and operational outcomes to their businesses.”

  Before joining Visual Lease, Cook was Senior Director of Global Bank Alliances at Coupa Software, the cloud platform for business spend management (BSM). Prior to Coupa Software, Cook served as FSI Partner Business Director at Concur Technologies, an SAP Company, where he was responsible for the organization’s top six banking partners.

  “I am honored to join the VL team in support of its mission to help organizations across the globe mitigate the risks and maximize the associated with their lease portfolio,” said Cook. “By joining forces with other industry leaders, we will collectively expand our reach and empower more businesses to gain complete control over their financial, operational and legal data with our platform.”

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom. 

  About Visual Lease  

  Visual Lease is the #1 lease optimization solution provider, empowering organizations to leverage their lease portfolio for strategic financial and operational outcomes. Our powerful and secure platform serves as a centralized system of record for all lease financial, operational and legal data, and is purpose-built to support every team that interacts with a company’s lease portfolio. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS, GASB and ISSB reporting requirements, and mitigate the risks and maximize the value associated with their lease records. Our award-winning software is used by 1,500+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.
  

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 770 2270
  ebonavitacola@visuallease.com     

  The post Visual Lease Appoints Gene Cook as Vice President of Global Partners first appeared on Visual Lease.]]> https://visuallease.com/comments-on-the-exposure-draft-ifrs-s2-climate-related-disclosures-by-the-issb-of-the-ifrs-foundation/ Tue, 01 Aug 2023 13:00:58 +0000 https://visuallease.com/?p=8399 Visual Lease, LLC (hereinafter “VL,” “we,” “our,” and “us”) appreciates being given an opportunity to comment on the Exposure Drafts published by the International Sustainability Standards Board (hereinafter the “ISSB”)...
  The post Comments on the Exposure Draft IFRS S2 Climate Related Disclosures by the ISSB of the IFRS Foundation first appeared on Visual Lease.]]> Visual Lease, LLC (hereinafter “VL,” “we,” “our,” and “us”) appreciates being given an opportunity to comment on the Exposure Drafts published by the International Sustainability Standards Board (hereinafter the “ISSB”) in March 2022. VL supports the direction of developing consistent climate related disclosures, as consistency in standards is necessary to permit users to analyze and understand entity disclosures. In the United States and globally, more entities have responded to the growing information needs of investors by implementing disclosure practices for non-financial information. This information has been inconsistently presented, however, and is therefore of limited usefulness. We hope that the IFRS Foundation’s work on setting out sustainability reporting standards will help create a high-quality and consistent corporate reporting system, which when used in combination with existing financial reporting, presents meaningful and useful information to the public. We welcome the publication of the ISSB’s two Exposure Drafts of standards for the disclosure of sustainability-related financial information.

  Questions for Respondents

  

  Visual Lease Response

  VL agrees with the objective of the exposure draft.

  

  Visual Lease Response

  VL agrees with the need for users to understand governance process, controls, and procedures used to monitor and manage climate-related risks and opportunities. However, we find two areas of concern in the guidance as written.
  First, we view Exposure Draft S1 and Exposure Draft S2 as complimentary, working hand in hand with each other. Neither will be taken independently of the other. In that vein, the Governance disclosures of S1 can be merely referenced into S2. While they are aligned today, seperately stating them can permit the versions to diverge in the future, which we do not believe to be the intent.

  Second, we believe that some of the more detailed disclosure requirements unique to S2 do not add value to users as they do not reflect the structure and workings of governance structures. We find it common for entities to establish governance structures and processes on an integrated basis, not on an individual sustainability theme basis. Therefore, the responsibility to address such sustainability-related risks and opportunities is more often integrated throughout the governance structure, not isolated. Investors, who are users of information, also expect such integrated governance structures to be established and to work effectively. Disclosures should be designed to correspond to such actual practices and information needs.

  

  Visual Lease Response

  VL understands that while climate-related risk is a global phenomenon, the unique nature of operations will mean every entity will have a unique exposure to risk. Various industries will have risks and opportunities that are both common and unique, so we find the approach outlined in Exhibit B to be appropriate. Ensuring these unique factors are consistently applied across all entities in an industry will ensure users have directly comparable data points.

  

  Visual Lease Response

  VL agrees that enviornmental-related risks may impact an entity’s business model by an impact on the value chain and not merely on the entity’s direct operations. We support the inclusion of the value chain in disclosure reporting.

  Given the additional degrees of separation, however, we agree that disclosing concentration of significant climate-related risks and opportunities in the value chain should be qualitative rather than quantitative. To make such disclosure quantitative would require estimation of the impact on the entities which comprise the value chain. We do not believe the reporting entity would have sufficient data to make those quantitative estimations. The reporting entity would then further have to estimate the share of the supply chain impact borne by them, and then estimate the subsequent impact on their operations. The margin of error in any such estimations makes their value dubious.

  
  

  Visual Lease Response

  We support the proposed disclosure requirements for transition plans. Transition plans will have more impact on short-term performance than any other disclosure area and is the activity most directly under the control of the entity. Therefore, we believe the resulting disclosure will be of great benefit to users.

  VL is also in favor of enhanced disclosure requirements for carbon offsets. The wide range of activities considered to be carbon offsets and the tremendous variation in price per ton of offset raise questions about the validity of certain schemes. We support enhanced disclosure so that the marketplace of users can evaluate their validity.

  
  

  Visual Lease Response

  VL generally supports the proposal that entities disclose quantitiative information on effects of climate-related risks. However, as discussed in our response to Question #4, some of the impacts of climate-related risks may not be estimated with a reasonable degree of certainty. Some may not be quantifiable. We believe that a range of quantitative disclosure, with appropriate qualitative supporting data, is the most beneficial package of information for users.

  We have further observed that other respondents raise the issue of the impact of baseline year selection on reported data. We have no particular perference on the selection of a baseline year when establishing objectives, goals and transition plans. We would just advise that the baseline year be disclosed, and probably the reason for selecting that particular baseline year (if appropriate).

  When disclosing the current and anticipated effects of risks, however, we believe that either the current year or the most recent full year presented to be the most appropriate baseline. Reporting the impact of a hypothetical future event in terms of impact on financial results from 10 years ago is an unnecessary burden on users and will hamper their ability to understand the impact of the risk.

  
  
  

  Visual Lease Response

  VL is in agreement with each of the components of this question. The wide variety of approaches mentioned in this question indicates that while the issue is not new, there continues to be significant development of knowledge in the field. To best understand the entity- or industry-specific risks, we support the ability to utilize alternative techniques so long as they are adequately disclosed. We have confidence that allowing their use will enhance further development of the technology, and allow the marketplace of users to evaluate their reliability.

  

  We agree that risk management should be expanded to include both risks and opportunities. In our experience, it is accurate that risks and opportunities can relate to or result from the same source of uncertainty.

  We believe that this area is a significant overlap with the Draft S1 requirements: therefore, we suggest affirming alignment between the two standards.

  
  
  

  Visual Lease Response

  1. We agree in general, with some reservations. As regards disclosure of GHG emissions, we fully support the disclosure of Scope 1 and 2 emissions. Given their nature, Scope 3 emissions cannot be estimated with the same level of certainty. We believe that the additional provisions attaching to Scope 3 reporting are beneficial, but would support additional refinement to ensure emissions are not overreported or underreported. While we see clear benefits to identifying risk assessments and opportunities, and the associated capital deployment, we do not see the same clarity of purpose to disclosing internal carbon costs and remuneration data. While we believe it may help understand the throught process behind the capital deployment, the actual amounts deployed are the more meaningful data.
  2. We do not see any additional cross-industry metrics which should be added.
  3. VL believes the GHG protocol represents the most comprehensive, widely accepted measurement standard for emissions. That said, there is a need for the data to be continuously reviewed and updated. The further one moves from direct measurement of emissions, the greater the potential for error. Scope 3 in particular is often two to three times removed from direct measurement, and subject to local variations. We recommend the process of the GHG protocal be utilized, but the local values should be substituted is more current and/or more relevant.
  4. We support the disclosure of Scope 1 and Scope 2 emissions in all cases. Given the uncertainty involved with Scope 3 emissions, and the additional cost inherent with gathering data, we believe it may be appropriate to phase in Scope 3 reporting requirements. We do support the inclusion of Scope 3 emissions if these are included in other reporting under this standard. We have no clear preference for reporting disaggregated emissions versus a single CO2e value.
  5. We agree with the requirement to report Scope 1 and Scope 2 emissions for the consolidated entity distinct from associations, joint ventures, etc. The consolidated entry reporting would be relatively straightforward. The GHG protocol addresses the issue with joint ventures, etc. in their principle of equity share, financial control or operational control. We support the IFRS decision to align with these principles.
  6. If Scope 3 emissions are to be included in reporting, we support their inclusion as an absolute gross amount. We further support the application of materiality to disclosure of Scope 3 emissions.

  

  Visual Lease Response

  VL agrees that the definition of “latest international agreement on climate change” is sufficiently clear. With that understanding, we agree with the proposed disclosure about climate-related targets. We believe that users compare the company-specific targets versus the agreement targets to assess the sufficiency of the target, then compare actual results against the target to assess performance.

  
  
  

  Visual Lease Response

  Regarding items (a) through (c), we agree with the approach to revising the SASB standards to enhance their international applicablity. We are indifferent to the three revision approaches; in fact we believe the facts associated with each standard may mean that different approaches are best suited to different standards. We only suggest that the revisions are perfomed with an eye to keeping the standard as constant as possible, so that an entity that has used the relevant SASB Standards in prior periods may continue to provide information consistent with the equivalent disclosures in prior periods.

  As regards iems (d) through (i), VL is not sufficiently knowledgeable about the proposed revisions to the existing SASB Standards address emerging consensus on the measurement and disclosure of financed or facilitated emissions in the financial sector to offer an opinion on the matter. We can only comment that the concept of “financed emissions” and “facilitated emissions” seems markedly different that the Scope 3 emissions associated with other industries.

  As regards the industry-based disclosure, requirements items (j) through (l), we fully support the approach of standards which reflect the unique attributes of different industries. Beyond that, we have no comments on any specific industry requirements.

  

  Visual Lease Response

  As a developer of a software solution for the various updated lease accounting standards globally adopted, we do not have direct insight into the expected costs of complying with the proposed environmental disclosure proposals. However, we believe the complexity of the proposed standards is an important parallel to the lease accounting standards. The rules are complex and pervasive, which will require entities to dedicate significant resources to compliance. Excel spreadsheets will be difficult to manage and will create opportunities for error to occur. Development of software to aid in tracking and disclosure will be an important condition for ensuring timely and accurate data presentation to users.

  

  Visual Lease Response

  Due to the breadth and variety of data encompassed by these standards, we feel it best to approach the issue of verifiability based on the nature of the data.

  Reporting Scope 1 and Scope 2 emissions are relatively straightforward and as such can be stringently verified. While greenhouse gas emissions are not directly measured, the source of the emissions can be directly measured, and the relationship to emissions is well established.

  Scope 3 emissions are indirectly measured. The relationship between the input measure and output emissions estimates can be validated, but validation of the input measure is a greater challenge.

  Other items in the standard move even further from direct measure. Estimating the financial impact to the entity of a hypothetical event impacting the entity’s value chain constitutes several degrees of separation. It becomes difficult to validate anything other than the internal mathematics of the modeling. In this instance, the standard would have to be reasonableness instead of accuracy. We believe that more detail about verification and enforcability is necessary.

  

  Visual Lease Response

  Visual Lease recognizes that adoption is a complex issue with no simple answer. We can look to our experience of adapting software for the new Lease Accounting requirements (IFRS 16, ASC 842) for some guidance. The changes to lease
  accounting were mere adjustments compared to the scope of Draft S1, and approximately three years passed between adoption and the effective date.

  On the other hand, we also recognize the rush in many jurisdictions to pass some sort of standard. We support the ISSB taking a leadership role in this issue, and so we do not suggest taking a longer approach. However, a phased implementation may be preferable. For instance, capturing and reporting Scope 1 and Scope 2 Greenhouse Gas Emissions is a relatively straightforward exercise and could be implemented sooner. Understanding the proper horizon for Scope 3 issues is a challenge of its own, much less estimating those emissions. The effective date should be later. Estimating the financial statement impact of hyppothetical environmental events requires extensive modeling, and therefore might best be phased in over time. In any event, we would certainly support a provision to permit early adoption of the standards.

  We would encourage the ISSB to leave open the possibility for individual jurisdictions to use an adoption waterfall, where the largest entities would adopt first, followed by successively smaller entites. By this method, the entities with the most resources to apply to the efforts can model and test the standards. The lessons learned from their implementation would then lessen the expense on smaller enterprises who are less able to bear the cost.

  We further support proposed relief from disclosing comparatives in the first year of application. We are concerned that entities might or delay adoption until at least two years of reliable information is available. We support adoption in the first year reliable information is available. However, if an entity has made prior disclosures we support using that information as comparative. If the prior disclosures do not comply with the new standards, we believe the comparison would still benefit users if the different methodologies are adequately explained.

  

  Visual Lease Response

  We only suggest the approach to digital reporting be consistent with the current approach to financial reporting.

  

  Visual Lease Response

  Visual Lease supports initiatives to establish globally consistent sustainability information disclosures. Environmental issues are truly global issues, and require a consistent application across all borders.

  As stated in our response to Question 13, we believe timing is probably the most important consideration that could limit the ability of Draft S1 to be used as a global baseline. The last standard to the playing field cannot become the baseline. For that reason we support a quick but measured path to an effective date.

  VL believes a building block approach is best suited to achieving this global baseline standard. First make effective those parts of the standard which are easiest to implement. Add the levels of complexity as we go along. We contend that this accretive approach is the most effective way to make this standard the global baseline.

  

  Visual Lease Response

  Visual Lease has no further comments.
  Respectfully Submitted,

  Joseph Fitzgerald
  Senior Vice President, Lease Market Strategy

  Visual Lease
  William Harter
  Principal Solutions Advisor
  Visual Lease

  The post Comments on the Exposure Draft IFRS S2 Climate Related Disclosures by the ISSB of the IFRS Foundation first appeared on Visual Lease.]]> https://visuallease.com/comments-on-the-exposure-draft-ifrs-s1-general-requirements-for-disclosure-of-sustainability-related-financial-information-by-the-issb-of-the-ifrs-foundation/ Tue, 01 Aug 2023 13:00:14 +0000 https://visuallease.com/?p=8380 Visual Lease, LLC (hereinafter “VL,” “we,” “our,” and “us”) appreciates being given an opportunity to comment on the Exposure Drafts published by the International Sustainability Standards Board (hereinafter the “ISSB”)...
  The post Comments on the Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information by the ISSB of the IFRS Foundation first appeared on Visual Lease.]]> Visual Lease, LLC (hereinafter “VL,” “we,” “our,” and “us”) appreciates being given an opportunity to comment on the Exposure Drafts published by the International Sustainability Standards Board (hereinafter the “ISSB”) in March 2022. VL supports the direction of developing consistent sustainability reporting standards, as consistency in standards is necessary to permit users to analyze and understand entity disclosures. In the United States and globally, more entities have responded to the growing information needs of stakeholders by implementing disclosure practices for non-financial information. This information has been inconsistently presented, however, and is therefore of limited usefulness. We hope that the IFRS Foundation’s work on setting out sustainability reporting standards will help create a high-quality and consistent corporate reporting system, which when used in combination with existing financial reporting, presents meaningful and useful information to the public. We welcome the publication of the ISSB’s two Exposure Drafts of standards for the disclosure of sustainability-related financial information, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate Related Disclosures.

  

  Visual Lease Response

  Overall, VL believes this Exposure Draft to be clear, understandable, and capable of meeting its objectives. Our overarching concern is that standards be developed which will enable auditors, regulators, and other stakeholders to not only assess a single entity’s environmental impact on its enterprise value, but to make relevant comparisons among entities. The standards must be consistently applied globally. While variations may be necessary based on industry or the types of activities measured, political boundaries should not be a consideration. This Exposure Draft meets those standards and clearly states that an entity would be required to identify and disclose material information about all of the sustainability-related risks and opportunities to which the entity is exposed.
  There are some minor issues we address in response to specific questions, but overall we consider this standard well developed.

  

  Visual Lease Response

  Overall, Visual Lease finds the objective to be clearly stated. The broad objective of Paragraph 1 is supported and explained well by most subsequent paragraphs, although the contents of Paragraph 6 (c) and (d) are more vague than we would like. A statement such as, “its relationships with people, the planet and the
  economy, and its impacts and dependencies on them,” does not provide clear prescriptive direction to entities. We would instead desire to see the standard address the relationship between the IFRS Sustainability Disclosure Standards as a global standard and country- or region-specific standards. We find the definitions used in the Objectives section to be clear.

  

  Visual Lease Response

  Visual Lease supports the application of the standards across any jurisdiction’s Generally Accepted Accounting Principles (GAAP). By its very nature, environmental issues apply globally and do not respect any political (or geographic) boundaries. While we recognize that the nature of different business enterprises may require differences in approach, as is contemplated here by the recognition of modifying some disclosure items for not-for-profit entities, the overall objectives must remain consistent.

  

  Visual Lease Response

  We find the objectives to be clear and appropriately defined. While individual metrics and targets may well evolve over time, the objectives give a clear and consistent framework. Establishing very detailed industry-specific metrics would be inconsistent with the objectives of the standard: to be able to provide the users of information a sufficient basis to assess the implications of sustainability-related risks and opportunities on the entity’s enterprise value. Overall, we believe that the ISSB has struck an appropriate balance between goals and specific requirements that enable primary users to assess enterprise value.

  Visual Lease supports the flexibility to report metrics either as an absolute measure or in relation to other metrics. This will allow information to be analyzed and understood by users in industry- or company-specific ways, enhancing the usefulness of the data.

  

  Visual Lease Response

  Environmental disclosures should be provided for the same reporting entity as for the related financial statements. While we generally support the provisions about sustainability-related risks and opportunities related to activities, interactions, and relationships, we believe the reference to “investments it controls” in paragraph 40(c) leaves unanswered questions. We generally support the use of the GHG Protocol approaches (equity share, financial control, operational control) and agree with its use here, but we believe some additional clarification may be required. Further, we believe that the “use of resources along its value chain” makes sense
  and adds some clarity to the economics, but also may have unanswered questions in practice.

  

  Visual Lease Response

  The requirement on the need for connectivity between various sustainability-related risks and opportunities is clear. The presentation of environmental risks and opportunities requires a complex set of estimation and analysis. Visual Lease believes that identifying and explaining these connections will aid users in understanding of the data presented. Without this additional explanation, transparancy could be reduced instead of enhanced, which is contrary to the objectives. Visual Lease expects that implementation guidance will be required after release of official guidance, but that timely release of the guidance is imperative.

  

  Visual Lease Response

  Visual Lease believes that by starting with the application of the IFRS Sustainability Disclosure Standards entities will have a clear reference point for disclosure. The ability to provide additional disclosures to supplement the standards will provide value to users. The principles outlined in Paragraphs 48 and 49 are paramount to creating useful disclosure. We believe the guidance in Paragraphs 50 through 55 to be reasonably complete, with the provision that it should not be considered exhaustive. The ability to present information which is relevant and useful, as outlined in Paragraphs 46 and 47, must be maintained.

  

  Visual Lease Response

  VL believes that while the definition of materiality is generally clear, there is potentially too much lattitude given to entities to apply judgement in determining thresholds. While we trust that most entities will apply the standard faithfully and consistently with the objectives of the standard, an unscrupulous entity could use materiality to obfuscate pertinent data.

  When information could be presented for multiple reporting entities,VL believes the standard established in Paragraph 37 should apply to materiality. If the sustainability-related financial disclosures should be for the same reporting entity as the related general purpose financial statements then the same materiality thresholds should apply to both.

  VL does agree with the proposal to relieve an entity from disclosing information
  otherwise required by the Exposure Draft if local laws or regulations prohibit
  the entity from disclosing that information as a general principle. We do not have sufficient information as to the potential application of this rule to make further comments.

  

  Visual Lease Response

  We agree with the proposal that the sustainability-related financial disclosures would be required to be provided at the same time as the financial statements to which they relate. We specifically wish to affirm our support of Paragraph 70, relating to interim reporting.

  

  Visual Lease Response

  Visual Lease agrees with the proposals about the location of sustainability-related
  financial disclosures. The approach of deliberately avoiding a requirement to provide the information in a particular location within the general purpose financial reporting is acceptable when combined with the requirement to ensure that the sustainability-related financial disclosures are clearly identifiable and not obscured by that additional information. This further extends to the proposal that information required by IFRS Sustainability Disclosure Standards can be included by cross-reference provided that the information is available to users of general purpose financial reporting on the same terms and at the same time as the information to which it is crossreferenced.

  

  Visual Lease Response

  VL is concerned that users be able to apply data consistently across periods in order to draw meaningful conclusions. The provisions of Paragraph 64 quantify the difference and explain the reason for the difference, and should be sufficient in
  most cases to protect the interests of the users. It is our belief that data be as accurate as possible: so, any time a better measure of a previously reported metric is available we support its use and proper disclosure.

  Overall, we support alignment of sustainability-related disclosures with financial disclosures.

  

  Visual Lease Response

  VL agrees with this proposal. The requirements for any statement of compliance should be equivalent between financial statements and sustainability disclosure statements.

  

  Visual Lease Response

  Visual Lease recognizes that adoption is a complex issue with no simple answer. We can look to our experience of adopting software for the new Lease Accounting requirements (IFRS 16, ASC 842) for some guidance. The changes to lease accounting were less extensive compared to the scope of Draft S1, and approximately three years passed between adoption and the effective date.

  On the other hand, we also recognize the imperative in many jurisdictions to pass some sort of standard quickly. We support the ISSB taking a leadership role in this issue, and so we do not suggest taking a longer approach. However, a phased implementation may be preferable. For instance, capturing and reporting Scope 1 and Scope 2 Greenhouse Gas Emissions is a relatively straightforward exercise and could be implemented sooner. Understanding the proper horizon for Scope 3 issues is more challengeing, much less estimating those emissions: the effective date may take longer. Estimating the financial statement impact of hyppothetical environmental events requires extensive modeling, and therefore might best be phased in over time.

  In any event, VL supports a provision to permit and encourage early adoption of the standards. We would encourage the ISSB to leave open the possibility for individual jurisdictions to use an adoption waterfall, where the largest entities would adopt first, followed by successively smaller entites. By this method, the entities with the most resources to apply to the efforts can model and test the standards. The lessons learned from their implementation would then lessen the expense on smaller enterprises who are less able to bear the cost.

  We further support proposed relief from disclosing comparatives in the first year of application. We are concerned that entities might delay adoption until at least two years of reliable information are available. We support adoption in the first year reliable information is available. However, if an entity has made prior disclosures, we support using that information as comparative. If the prior disclosures do not comply with the new standards, we believe the comparison would still benefit users if the different methodologies are adequately explained.

  

  Visual Lease Response

  Visual Lease supports initiatives to establish globally consistent sustainability information disclosures. Environmental issues are truly global issues, and require a consistent application across all borders.

  As stated in our response to Question 13, we believe timing is probably the most important consideration that could limit the ability of Draft S1 to be used as a global baseline. The last standard to the playing field cannot become the baseline. For that reason we support a quick but measured path to an effective date.

  VL believes a building block approach is best suited to achieving this global baseline standard. First make effective those parts of the standard which are easiest to implement. Add the levels of complexity as the standards evolve. We contend that this accretive approach is the most effective way to make this standard the global baseline.

  

  Visual Lease Response

  We only suggest the approach to digital reporting be consistent with the current approach to financial reporting.

  

  Visual Lease Response

  Given the breadth and extent of the disclosures proposed, we can safely say that the costs of compliance will be high. We have seen estimates of 1,300 person hours per year to meet compliance requirements.1 We cannot speak to the accuracy of that number, but our experience with the adoption of Lease Accounting policy changes (IFRS 16, etc.) is illustrative.

  There is a significant cost initially to gather the required information and to set up the processes to meet the requirements. In the United States, the effort was so significantly higher than estimated that implementation for Private Business Entities was deferred a year to permit sufficient time.

  Entities who initially tried to capture the required information in Excel spreadsheets found the workload to be extremely high, and the risk of errors very high as well. Costs went down and accuracy increased as compliance software became available.

  

  Visual Lease Response

  Visual Lease has no further comments.

  Respectfully Submitted,

  Joseph Fitzgerald
  Senior Vice President, Lease Market Strategy
  Visual Lease

  William Harter
  Principal Solutions Advisor
  Visual Lease

  1. Jill Klindt, “ESG reporting requires the right people and processes”, Accounting Today, July 20, 2022

  The post Comments on the Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information by the ISSB of the IFRS Foundation first appeared on Visual Lease.]]> https://visuallease.com/streamline-your-finances-six-reasons-why-small-and-mid-sized-businesses-need-accounting-software/ Thu, 27 Jul 2023 13:00:01 +0000 https://visuallease.com/?p=8116 In today’s fast-paced business landscape, small and mid-sized businesses (SMBs) face numerous challenges in managing their financial operations efficiently. As a business owner, you may be wondering “Do I need...
  The post Streamline Your Finances: Six Reasons Why Small and Mid-Sized Businesses Need Accounting Software first appeared on Visual Lease.]]> In today’s fast-paced business landscape, small and mid-sized businesses (SMBs) face numerous challenges in managing their financial operations efficiently. As a business owner, you may be wondering “Do I need accounting software for my small business?” The answer is a resounding yes. Accounting software offers numerous benefits that can significantly impact the success and efficiency of your small business. 

  Here are six compelling reasons why accounting software is essential for your small or medium-sized business:

  1. Enhanced Financial Organization:

     Accounting software provides a comprehensive platform for organizing and managing financial data. By automating repetitive tasks like data entry, invoicing, and expense tracking, SMBs can streamline their financial processes, saving time and reducing the likelihood of errors. With a centralized system, businesses can easily access and retrieve critical financial information, facilitating accurate and timely decision-making.

  2. Simplified Bookkeeping:

     Manual bookkeeping can be time-consuming and error-prone, especially for SMBs with limited resources. Accounting software automates essential bookkeeping tasks, such as recording transactions, reconciling accounts, and generating financial statements. By eliminating manual entry and calculations, the software minimizes the risk of human error and ensures accurate financial records.

  3. Efficient Invoicing and Payment Management:

     For SMBs, maintaining a healthy cash flow is vital. Accounting software enables businesses to generate professional invoices, track payment statuses, and send reminders for overdue payments. With automated payment processing capabilities, businesses can expedite cash inflows, reducing the time spent on chasing payments and improving overall cash flow management.

  4. Financial Analysis and Reporting:

     Understanding the financial health of your business is crucial for making informed decisions and setting strategic goals. Accounting software provides robust reporting tools that generate real-time financial statements, profit and loss reports, balance sheets, and cash flow statements. These insights help SMBs identify trends, pinpoint areas of improvement, and make data-driven decisions to drive growth.

  5. Compliance with Accounting Standards:

     Adhering to accounting standards is essential for accurate financial reporting and maintaining regulatory compliance. Accounting software is designed to stay up-to-date with the latest accounting regulations, ensuring that your business meets the necessary standards. For instance, lease accounting software specifically caters to the complexities of lease accounting, helping SMBs comply with ASC 842 or IFRS 16 guidelines.

  6. Time and Cost Savings:

     By automating financial tasks and reducing manual effort, accounting software saves SMBs valuable time and resources. This allows business owners and finance teams to focus on core operations, customer relationships, and strategic planning. Additionally, minimizing errors and improving financial efficiency can result in cost savings and contribute to overall business profitability.

  In today’s digital era, small and mid-sized businesses can significantly benefit from utilizing accounting software. With features tailored to their unique needs, such software enhances financial organization, simplifies bookkeeping, streamlines invoicing and payment management, provides valuable financial insights, ensures compliance, and ultimately saves time and costs. Whether you require general small business accounting software or specialized lease accounting software, investing in the right solution will empower your business to thrive and make informed financial decisions that drive growth and success.

  The post Streamline Your Finances: Six Reasons Why Small and Mid-Sized Businesses Need Accounting Software first appeared on Visual Lease.]]> https://visuallease.com/understanding-the-meaning-of-your-lease-commencement-date/ Fri, 21 Jul 2023 13:12:13 +0000 https://visuallease.com/?p=8109 In the world of leasing agreements, there can be some confusion when it comes to the terminology used by attorneys and accountants. One such term is the “lease commencement date.”...
  The post Understanding the Meaning of Your Lease Commencement Date first appeared on Visual Lease.]]> In the world of leasing agreements, there can be some confusion when it comes to the terminology used by attorneys and accountants. One such term is the “lease commencement date.” While attorneys may interpret it as a specified date within the contract, accountants view it differently. In this blog post, we will explore the disparity in meaning between the lease commencement date for attorneys and accountants. Additionally, we will discuss the distinction between the lease start date and the move-in date, as well as the significance of the lease accounting effective date.

  What Is a Lease Commencement Date? 

  A lease commencement date is the specific date on which a lease agreement becomes effective, and the tenant takes possession of the leased property. It marks the beginning of the lease term during which the tenant has the right to occupy and use the property, while the landlord is obligated to provide possession of the premises as agreed upon in the lease.

  Lease Commencement Date Definitions

  • Lease Term: The period during which the tenant has the right to occupy the leased property. It starts on the lease commencement date and ends on the lease expiration date.
  • Lease Commencement Date: The specific date on which the lease agreement becomes effective, and the tenant takes possession of the leased property.
  • Rent Commencement Date: The date from which the tenant becomes liable to pay rent to the landlord. It is typically the same as the lease commencement date, but there may be situations where the rent commencement date differs from the lease commencement date.
  • Occupancy Date: It refers to the date when the tenant physically occupies the leased property. It is often the same as the lease commencement date, but it can sometimes be earlier or later, depending on the terms of the lease agreement.
  • Effective Date: The date on which the lease agreement is signed by both parties and becomes legally binding. It may or may not be the same as the lease commencement date.
  • Commencement Certificate: A document issued by the landlord or an authorized representative confirming the lease commencement date and the tenant’s possession of the premises.
  • Rent Abatement: A provision in the lease agreement that allows for a temporary reduction or suspension of rent payments during specific circumstances, such as when the premises are undergoing renovations or repairs before the tenant moves in.
  • Holdover Period: A period that occurs when a tenant continues to occupy the leased premises after the lease term has expired without signing a new lease or terminating the tenancy. The terms regarding the holdover period are usually outlined in the original lease agreement.

  How Do You Determine A Lease Commencement Date? 

  Attorney’s Perspective on Lease Commencement Date

  For attorneys, the lease commencement date is a date defined within the leasing contract. It could be the date on which the contract was signed, or some other predetermined effective date specified in the agreement. This date holds legal significance and serves as a reference point for various contractual obligations and rights.

  Accountants’ Perspective on Lease Commencement Date

  In contrast, accountants perceive the lease commencement date as the point at which the lessee gains possession and control of the leased asset. This date could be when the lessee moves into the property or when they receive access to initiate specific construction work. Essentially, it is the actual start date of the lease from an accounting standpoint.

  Can the lease commencement date vary depending on the circumstances?

  The commencement date from an accounting perspective can vary depending on the circumstances. It might coincide with the lease start date, the move-in date, or even the date when the keys are delivered. Whichever event occurs first will be considered the lease commencement date for accounting purposes.

  Importance of Lease Commencement Date for Accounting

  Understanding the lease commencement date is crucial for accurate lease accounting. It determines when the lessee should begin recording the leased asset and the associated liability. It also marks the starting point for expensing the lease. In the case of an operating lease, the expense is typically recognized on a straight-line basis. Conversely, for a finance lease, the amortization of the asset is straight-lined. Regardless, both the asset recording and expense recognition commence from the accounting commencement date, rather than the date of the first rent payment or the effective date specified in the contract.

  Although the lease commencement date may seem straightforward, its interpretation differs between attorneys and accountants. Attorneys focus on the contractual definition, while accountants emphasize the actual possession and control of the leased asset. Understanding this discrepancy is vital for accurate lease accounting, as it determines when to record the asset, liability, and associated expenses. By clarifying the distinction between the lease start date, move-in date, and the lease accounting effective date, both lessors and lessees can ensure compliance with accounting standards and avoid any potential misunderstandings in lease agreements.

  Lease Commencement Date FAQ’s

  What is the difference between the lease commencement date and the effective date?

  The lease commencement date and the effective date are related but distinct terms in the context of a lease agreement. Here’s how they differ:

  •  Lease Commencement Date: The lease commencement date refers to the specific date when the lease term begins, and the tenant takes possession of the leased property. It marks the start of the tenant’s occupancy and the landlord’s obligation to provide possession. On this date, the tenant assumes responsibility for paying rent and adhering to the terms and conditions outlined in the lease.
  •  Effective Date: The effective date, on the other hand, refers to the date when the lease agreement becomes legally binding and enforceable. It is the date when the lease contract is signed by both the landlord and the tenant, indicating their agreement to the terms and conditions of the lease. The effective date may or may not be the same as the lease commencement date.

   In some cases, the effective date and the lease commencement date coincide, meaning the lease becomes effective and the tenant takes possession of the property on the same day. However, there can be instances where the effective date precedes the lease commencement date. For example, if a lease agreement is signed in advance but the tenant’s occupancy doesn’t begin until a later date, the effective date remains the date of signing while the lease commencement date is the actual start of tenancy.

  What is the difference between the lease commencement date and the inception date?

  The lease commencement date and the inception date are related to the start of a lease agreement, but they have slightly different meanings. While the Lease Commencement date refers to the specific date when the lease term begins, and the tenant takes possession of the leased property, the inception date, generally refers to the date when the lease agreement is formed or comes into existence. It is the date when the initial terms and conditions of the lease are agreed upon and documented in the lease agreement, regardless of when the tenant actually takes possession of the property. The inception date is essentially the starting point of the contractual relationship between the landlord and the tenant.

  In simpler terms, the lease commencement date is the date when the tenant begins occupying the premises and the lease term starts, whereas the inception date is the date when the lease agreement itself is formed.

  Is the lease commencement date the same as the date of the first rent payment or the effective date specified in the contract?

  The lease commencement date may or may not be the same as the date of the first rent payment or the effective date specified in the contract.

  In some cases, the lease commencement date, the date of the first rent payment, and the effective date may all align, meaning they occur on the same day. However, it’s also common for these dates to be different, depending on the specific terms negotiated between the landlord and the tenant.

  To determine the relationship between these dates, it is necessary to refer to the lease agreement itself, as it will explicitly state when the lease commencement date, the first rent payment, and the effective date occur in the specific context of that agreement.

  How does understanding the lease commencement date prevent misunderstandings in lease agreements?

  Understanding the lease commencement date is crucial in lease agreements to prevent misunderstandings and ensure clarity between the parties involved. Here are 6 ways it helps:

  1. Clear start of occupancy: The lease commencement date specifies the exact date when the tenant can legally occupy the leased property. This clarity prevents any confusion or disputes about when the tenant can take possession of the premises.
  2. Rent calculation: Lease agreements typically outline the rent payment terms, which often include a monthly or annual basis. The lease commencement date allows both parties to determine the accurate start date for calculating the rental amount, avoiding disagreements over when the rent obligation begins.
  3. Term of the lease: The lease commencement date establishes the duration of the lease agreement. It defines the start and end points of the lease term, ensuring that both parties are aware of the specific time period covered by the agreement. This prevents misunderstandings about the lease’s duration and avoids premature termination or extensions.
  4. Maintenance and repairs: The lease commencement date serves as a reference point for maintenance and repairs. It establishes when the tenant becomes responsible for the upkeep of the property, and any pre-existing damages or repairs needed before the tenant’s occupancy can be determined. This clarity minimizes disputes over maintenance responsibilities and the condition of the property at the start of the lease.
  5. Legal obligations: Certain legal obligations, such as providing notice to terminate the lease, may be tied to the lease commencement date. Understanding this date ensures that both parties comply with their respective legal obligations and prevents misunderstandings or violations of the lease agreement.
  6. Timeline for negotiations: The lease commencement date provides a timeline for negotiations and preparations between the landlord and tenant. It allows both parties to plan and coordinate activities related to move-in logistics, such as inspections, renovations, or obtaining permits. Clarity regarding the lease commencement date facilitates effective communication and minimizes misunderstandings during the preparation phase.

  Overall, understanding the lease commencement date in lease agreements promotes transparency, reduces disputes, and provides a common reference point for both parties involved. It ensures that the terms, obligations, and responsibilities within the lease agreement are clearly defined, preventing misunderstandings that can lead to conflicts or legal issues.

  What are the implications of not accurately determining the lease commencement date?

  Failing to accurately determine the lease commencement date can have several implications and consequences for both the landlord and the tenant. Here are 6 potential issues that may arise:

  1. Ambiguity and disputes: Without a clear lease commencement date, there is room for ambiguity and confusion about when the tenant’s occupancy rights and rent obligations begin. This can lead to disputes between the parties, as each may have a different understanding of when the lease officially starts.
  2. Rent calculation discrepancies: The lease commencement date is crucial for calculating rent amounts accurately. If the date is not properly determined, it can result in disagreements about the rental amount and the duration for which it applies. This can lead to financial disputes and potential financial losses for both parties.
  3. Legal compliance issues: The lease commencement date often has legal implications tied to it, such as notice periods for termination or other legal obligations. Failing to determine the date accurately can result in non-compliance with these legal requirements, which may have legal consequences or negatively impact the rights and responsibilities of both parties.
  4. Delayed occupancy or premature termination: Inaccurately determining the lease commencement date can cause delays in the tenant’s occupancy, particularly if the date is later than expected. Conversely, if the date is earlier, it may result in premature termination of the previous tenant’s lease or inadequate time for necessary preparations. These situations can disrupt the tenant’s plans and lead to financial losses or legal complications.
  5. Inadequate time for preparations: The lease commencement date is an essential reference point for various activities such as property inspections, repairs, renovations, and obtaining necessary permits. If the date is not accurately determined, it can lead to insufficient time for these preparations, affecting the condition of the property or the tenant’s ability to move in smoothly.
  6. Misalignment with other agreements: In some cases, the lease commencement date may need to align with other agreements or contracts, such as utility connections, insurance coverage, or leasehold improvements. Failing to accurately determine the date can result in a mismatch between these agreements, leading to logistical complications or contractual breaches.

  It is important for both landlords and tenants to ensure that the lease commencement date is accurately determined and clearly documented in the lease agreement. Doing so minimizes the potential for misunderstandings, disputes, and legal complications, promoting a smooth and mutually beneficial leasing experience for all parties involved.

  The post Understanding the Meaning of Your Lease Commencement Date first appeared on Visual Lease.]]> https://visuallease.com/unlocking-efficiency-and-sustainability-exploring-contract-management-systems/ Thu, 20 Jul 2023 13:00:44 +0000 https://visuallease.com/?p=8428 Contract management plays a crucial role in modern business operations, ensuring effective collaboration, risk mitigation, and regulatory compliance. With the growing importance of environmental, social, and governance (ESG) considerations, contract...
  The post Unlocking Efficiency and Sustainability: Exploring Contract Management Systems first appeared on Visual Lease.]]> Contract management plays a crucial role in modern business operations, ensuring effective collaboration, risk mitigation, and regulatory compliance. With the growing importance of environmental, social, and governance (ESG) considerations, contract management systems have evolved to encompass sustainability factors. In this blog post, we delve into the world of contract management, highlighting its key functions the integration of ESG elements. By understanding the fundamentals of contract management and its alignment with ESG requirements, businesses can enhance efficiency and sustainability across their value chains.

  What is Contract Management System?

  A contract management system refers to the structured approach and technology utilized to oversee the complete lifecycle of contracts. It goes beyond simply accounting for legal terms and conditions and extends to managing relationships, obligations, and performance throughout the contract’s duration. A contract management system streamlines processes, centralizes information, and provides organizations with the tools to effectively create, negotiate, execute, and monitor contracts.

  Contract Management Functions:

  Contract management systems encompass several key functions that contribute to effective contract administration and performance:

  • Document Management: Efficiently store, organize, and retrieve contract documents, including agreements, amendments, and related correspondence.
  • Workflow Automation: Streamline contract-related processes, automate notifications, approvals, and tasks, ensuring timely execution and adherence to deadlines.
  • Compliance and Risk Management: Monitor contractual compliance, identify potential risks, and implement risk mitigation strategies to safeguard the organization’s interests.
  • Performance Tracking: Monitor and measure contract performance against established metrics, enabling proactive management and facilitating data-driven decision-making.
  • Reporting and Analytics: Generate reports and analytics to gain insights into contract performance, identify trends, and support strategic decision-making.

  Integration of ESG Considerations:

  In the era of ESG awareness, contract management systems have expanded their scope to incorporate sustainability factors. This includes tracking and reporting on carbon emissions across the value chain, considering the environmental impact of contracted goods and services, and ensuring compliance with ESG goals. Organizations are increasingly leveraging contract management systems to capture ESG data, monitor supplier sustainability practices, and align contract terms with sustainability objectives.

  Contract management systems have become essential tools for organizations seeking operational efficiency, risk mitigation, and ESG integration. By implementing robust contract management systems, businesses can optimize contract lifecycle management, foster transparency, and align contractual relationships with sustainability goals. Embracing the phases of contract management and leveraging technology-driven solutions, organizations can navigate the complexities of contract administration while addressing ESG considerations, fostering responsible business practices, and driving sustainable value creation.

  The post Unlocking Efficiency and Sustainability: Exploring Contract Management Systems first appeared on Visual Lease.]]> https://visuallease.com/esg-reporting-simplified-your-top-questions-answered/ Mon, 17 Jul 2023 14:00:51 +0000 https://visuallease.com/?p=8488 VL experts break down the recently announced sustainability reporting standards from the International Sustainability Standards Board (ISSB) The first-ever set of standards recently unveiled by the International Sustainability Standards Board...
  The post ESG Reporting Simplified: Your Top Questions Answered first appeared on Visual Lease.]]> VL experts break down the recently announced sustainability reporting standards from the International Sustainability Standards Board (ISSB)

  The first-ever set of standards recently unveiled by the International Sustainability Standards Board (ISSB) are a big step forward for global ESG and sustainability reporting standards. These new standards, S1 and S2, will have long-standing implications for sustainability regulation, data collection and reporting. Visual Lease has helped clients adapt to new regulations and track complicated metrics for nearly three decades, and recently launched the VL ESG Steward in anticipation of ESG reporting becoming the next great challenge for finance and real estate teams.

  Today, we’re answered the top questions our ESG clients have about how to best prepare for these new regulations. 

  What are the S1 and S2 standards announced by the ISSB?

  The S1 and S2 standards are the ISSB’s new guidelines for sustainability disclosure. The S1 standard (titled “General Requirements for Disclosure of Sustainability-related Financial Information) aims to identify sustainability risks and opportunities, then assess their impact on the value of the enterprise. The S1 standard considers all sustainability risks and opportunities.

  The S2 standard is focused specifically on climate-related issues, including the disclosure of greenhouse gas emissions along with other industry-specific topics.

  When are these standards expected to go into effect?

  The ISSB published the S1 and S2 standards in late June. The standards will be effective with corporate fiscal years starting January 1, 2024. 

  What do these standards mean for U.S. organizations?

  Though the ISSB develops sustainability disclosure standards, it does not have regulatory authority. This means the implication on U.S. organizations will depend on the discretion of authorities in different jurisdictions.

  U.S. organizations may be required to report under ISSB guidelines directly, under guidelines like those adopted for the European Union by the European Financial Reporting Advisory Group (EFRAG). 

  Although no nation has yet adopted the ISSB standards, many have indicated their intent to do so. It’s reasonable to assume that if a U.S. organization must report accounting under the International Financial Reporting Standards (IFRS), it is likely ISSB reporting will also require ESG accounting.

  What are some of the anticipated benefits of these standards to organizations? What are the risks of not meeting them?

  Apart from environmental benefits, maintaining a positive relationship with your customers is perhaps the most significant benefit, particularly in the B2B world. Organizations that must report for regulatory reasons require this information and are likely to cut ties with companies that don’t meet their ESG goals. 

  The same goes for direct-to-consumer businesses. A recent statistic from PwC noted that 76% of consumers say they will stop buying from companies that treat the environment, employees, or the community in which they operate poorly.

  Access to capital can also suffer from poor or non-existent ESG reporting. Moody’s Investor Services reports one of five organizations suffered a credit rating setback after an assessment of their adherence to ESG best practices. 

  Robust ESG reporting can even make an organization more efficient, eliminating or reducing unnecessary travel, and reducing excessive waste — there are countless potential benefits. 

  What data should organizations start tracking to prepare for this new level of reporting?

  The ISSB understands the enormous scope of sustainability reporting. To address this, in April 2023, the board decided to introduce a transition relief in IFRS S1 that allows an entity to report on only climate-related risks and opportunities. These can be broken down into three pillars: energy consumption and greenhouse gas emissions, water usage, waste generation, and biodiversity. 

  How else can organizations set themselves up for ESG reporting success?

  At Visual Lease, we define ESG reporting success as generating reports that clearly present understandable and verifiable metrics. 

  We recommend three steps to make this possible. First, establish a task force responsible for handling everything ESG requires. Next, you’ll want to establish your inventory. ISSB is prioritizing energy and greenhouse gas emissions, but these are also the most complex to track. Any fuel expenditure should be tracked. Gas-fired HVAC and water heaters, diesel-powered emergency generators and propane-powered forklifts are all sources of energy and emissions. Lastly, establish controls around the data flow and ensure an audit trail is available for the necessary attestation.  

  Keep in mind that the goal is not to grasp as much data as possible. We recommend capturing what is consistently obtainable with controls to ensure the data is accurate. This will serve as a baseline to complete additional ESG requirements as they are phased in.  

  Where should organizations look for the latest news on ESG regulations?

  Going directly to the source for information is the best way to get news on ESG regulations, but the reports from the ISSB, SEC, and EFRAG can be very difficult to follow and understand. Regulators are required to speak and write in very precise, technical language, which is often too complex for non-experts to follow. Even non-regulatory bodies often use very technical language or push agendas to promote certain outcomes.

  At Visual Lease, we believe a mix of advisory firms is the best way to stay on top of the latest ESG developments. Given the ISSB requirements, all of the large accounting firms are developing a strong ESG advisory practice. Most are supporting regular webcasts, publications, and continuing education on the topic. These resources do an excellent job of aggregating the technical information and presenting it in a manner that is easy to understand.

  The post ESG Reporting Simplified: Your Top Questions Answered first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-continues-significant-growth-in-second-quarter/ Thu, 13 Jul 2023 14:16:12 +0000 https://visuallease.com/?p=8474 Dedicated investments in its solutions, services and leadership expand company value Woodbridge, NJ – July 13, 2023— Visual Lease, the #1 lease optimization software provider, today announced its results from...
  The post Visual Lease Continues Significant Growth in Second Quarter first appeared on Visual Lease.]]>

  Dedicated investments in its solutions, services and leadership expand company value

  Woodbridge, NJ – July 13, 2023— Visual Lease, the #1 lease optimization software provider, today announced its results from Q2 2023, reporting double-digit annual recurring revenue and customer percentage growth, year-over-year.

  “Today, finance and operational leaders are working together in shaping and realizing their organization’s growth strategies,” said Robert Michlewicz, CEO of Visual Lease. “Their ability to make informed and effective decisions around critical areas, such as budget and resource allocation, as well as ESG program development and reporting, hinges on the integrity of their organization’s data. By 2025, 50% of FP&A leaders will have enterprise-wide data strategy as a core responsibility, furthering the need for technology-backed data management processes. At Visual Lease, our proven solutions make it easy for cross-functional teams to accurately track and report on dynamic financial and operational datasets.”

  In Q2 2023, Visual Lease:

  • Expanded its platform value.
    With its 23.6 release, Visual Lease launched a new Currency API to automatically update and synchronize foreign exchange rates to maintain consistency and comparability across Visual Lease, the ERP and the customer’s entire finance ecosystem. Visual Lease facilitates unlimited currencies and allocations for lease accounting to support multinational organizations.
  • Enhanced its customer support offerings.
    Visual Lease established Technical Account Managers (TAMs) to address enterprise clients’ evolving business needs. This offering extends value to direct customers and supports the company’s growing partner network.
  • Recognized as an industry leader.
    G2 named Visual Lease a Leader in Enterprise Lease Administration and Enterprise Lease Accounting, as well an overall Leader in the Lease Accounting and Lease Administration categories. Visual Lease was also named a High Performer in the Small-Business Lease Administration category.
  • Held its quarterly Customer Advisory Board (CAB) meeting.
    Visual Lease’s executive leadership team invited a select group of customers to discuss and provide feedback on upcoming expanded reporting features, product roadmap prioritization and Visual Lease’s strategic vision. Visual Lease will hold its annual on-site CAB meeting in Q3 2023.
  • Held Summer Innovation Days.
    Visual Lease empowered team members from across the organization to come together and share creative ideas for developing new platform capabilities to support customers’ needs and align to its corporate vision. The result – several platform extensions now included in our roadmap for review and consideration with our clients and partners.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease, the #1 lease optimization software provider, empowers organizations to leverage their lease portfolio as a strategic asset. Our platform is uniquely designed to meet the needs of every team that interacts with a company’s lease portfolio to reduce risk, drive confident and sustained lease accounting compliance and provide the visibility required to make agile business decisions. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS and GASB lease accounting standards and implement proper lease controls to improve the financial, legal and operational performance of their leases. Our award-winning software is used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.

  Media Contact

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Visual Lease Continues Significant Growth in Second Quarter first appeared on Visual Lease.]]> https://visuallease.com/understanding-lease-incentives-why-theyre-important-and-accounting-considerations-under-asc-842/ Thu, 13 Jul 2023 13:00:39 +0000 https://visuallease.com/?p=8111 Lease incentives play a crucial role in lease agreements, representing payments made by the lessor either to the lessee or on behalf of the lessee. These incentives are an integral...
  The post Understanding Lease Incentives: Why They’re Important and Accounting Considerations under ASC 842 first appeared on Visual Lease.]]> Lease incentives play a crucial role in lease agreements, representing payments made by the lessor either to the lessee or on behalf of the lessee. These incentives are an integral part of the total consideration of the lease contract, and it is essential to account for them along with other payment streams in the associated cash flows. In this blog post, we will explore lease incentives in more detail, their importance, and how they impact the financial aspects of a lease, specifically under ASC 842.

  Lease Incentives: Importance and Purpose

  Lease incentives hold significant importance in lease agreements for several reasons. Firstly, they enable lessees to make improvements to a property, customizing it to meet their specific needs. This flexibility is particularly valuable when lessees require modifications or alterations to align the space with their business operations. By offering financial support, lessors encourage lessees to lease their properties and foster long-term relationships.

  Accounting Considerations under ASC 842

  ASC 842, the Financial Accounting Standards Board’s lease accounting standard, provides guidelines for the recognition, measurement, and presentation of lease incentives. It mandates that lease incentives should be accounted for in a manner that accurately reflects the economic substance of the lease transaction.

  When applying ASC 842, companies must carefully evaluate their approach to lease incentives. The standard requires the proper identification and classification of lease incentives within the lease agreement. Lease incentives should be measured and recognized separately from other components of the lease, ensuring transparency and compliance with the accounting standard.

  Lease Incentive Programs

  Some lessors may implement lease incentive programs to attract and retain lessees. These programs offer various incentives, such as rent abatements, tenant improvement allowances, or rent holidays. Lease incentive programs can be structured differently, and their accounting treatment may vary based on the specific terms and conditions outlined in the lease agreement.

  By participating in a lease incentive program, lessees can benefit from reduced costs associated with leasehold improvements, making the space more suitable for their operations. However, it is essential for lessees to understand the implications of these incentives, including potential obligations or adjustments to lease terms in exchange for the offered benefits.

  Lease incentives are integral components of lease agreements, serving to facilitate lessees’ ability to customize properties and meet their specific requirements. Proper accounting for lease incentives, in accordance with ASC 842, is essential for accurate financial reporting and compliance. By recognizing the importance of lease incentives and adhering to the guidelines set forth in accounting standards, companies can ensure transparency, enhance decision-making processes, and establish a solid foundation for lease transactions.

  The post Understanding Lease Incentives: Why They’re Important and Accounting Considerations under ASC 842 first appeared on Visual Lease.]]> https://visuallease.com/esg-accounting-integrating-sustainability-into-financial-reporting/ Wed, 12 Jul 2023 13:00:40 +0000 https://visuallease.com/?p=8427 As businesses increasingly recognize the importance of environmental, social, and governance (ESG) factors, the concept of ESG accounting has gained prominence. This blog post aims to shed light on ESG...
  The post ESG Accounting: Integrating Sustainability into Financial Reporting first appeared on Visual Lease.]]> As businesses increasingly recognize the importance of environmental, social, and governance (ESG) factors, the concept of ESG accounting has gained prominence. This blog post aims to shed light on ESG accounting and its role in financial reporting. From carbon accounting to capturing the financial impact of environmental events, ESG accounting encompasses a wide range of considerations that companies must address. 

  What is ESG Accounting?

  ESG accounting is the incorporation of ESG factors into financial reporting processes. It goes beyond traditional financial metrics by considering the environmental, social, and governance aspects of a company’s operations. The recently released ISSB standards, including the S1 and S2 standards, underscore the significance of ESG accounting by requiring companies to report on climate-related disclosures and their financial implications. This comprehensive approach ensures that companies transparently disclose their environmental impact and address the repercussions on financial statements.

  Carbon Accounting and Climate Disclosures:

  A crucial component of ESG accounting is carbon accounting. With the growing concern over climate change, companies are now required to report on their actual or projected emissions of greenhouse gases and carbon, along with other environmental impacts. This information allows stakeholders to gain a comprehensive understanding of a company’s carbon footprint. By quantifying and disclosing carbon-related data, businesses can demonstrate their commitment to mitigating climate risks and reducing their environmental impact.

  Financial Impact of Environmental Events:

  ESG accounting goes beyond carbon accounting and encompasses the financial impact of environmental events. As climate-related incidents become more prevalent, businesses must recognize and report on the effects of such events on their financial statements. For instance, if a company experiences a decline in attendance or cancels outdoor events due to poor air quality resulting from natural disasters or wildfires, these climate-related impacts must be isolated and reported as changes to the financial position. This level of reporting ensures that stakeholders have a holistic view of the financial implications associated with environmental events.

  ESG Reporting and FASB:

  The Financial Accounting Standards Board (FASB), while not directly involved in ESG standard setting, acknowledges the growing relevance of ESG factors in financial reporting. FASB encourages companies to consider the impact of ESG matters on their financial statements, emphasizing the need for transparent and accurate reporting. While the ISSB standards do not have the legal authority of FASB, they serve as a globally applicable framework for ESG reporting, with nations adopting and aligning their reporting practices accordingly.

  Non-Financial Reporting Directive (NFRD): 

  The Non-Financial Reporting Directive (NFRD) is a European Union (EU) directive that sets out requirements for certain large companies to disclose non-financial information, including environmental, social, and governance (ESG) factors. The directive aims to improve transparency and accountability in corporate reporting, ensuring that companies provide relevant and consistent information about their ESG performance. Under the NFRD, companies that meet specific criteria, such as being listed on EU regulated markets and having more than 500 employees, are required to include non-financial information in their management reports. The information should cover environmental, social, and employee matters, human rights, anti-corruption, and diversity.

  ESG accounting represents a paradigm shift in financial reporting, enabling companies to demonstrate their commitment to sustainable practices and long-term value creation. By integrating ESG factors into financial statements, businesses provide stakeholders with a comprehensive view of their environmental impact and the financial implications associated with it. Carbon accounting and reporting on the financial impact of environmental events are crucial elements of ESG accounting, ensuring transparent disclosures and informed decision-making. As ESG reporting gains momentum, businesses must embrace the evolving landscape and seize the opportunity to become catalysts for positive change.

  The post ESG Accounting: Integrating Sustainability into Financial Reporting first appeared on Visual Lease.]]> https://visuallease.com/introducing-the-new-issb-standards-a-game-changer-for-sustainability-reporting/ Tue, 11 Jul 2023 13:00:26 +0000 https://visuallease.com/?p=8426 In recent times, the importance of sustainability in financial reporting has gained significant traction. To address this growing need, the newly formed International Sustainability Standards Board (ISSB) has released two...
  The post Introducing the New ISSB Standards: A Game-Changer for Sustainability Reporting first appeared on Visual Lease.]]> In recent times, the importance of sustainability in financial reporting has gained significant traction. To address this growing need, the newly formed International Sustainability Standards Board (ISSB) has released two exposure drafts of sustainability standards called S1 and S2. After careful consideration of user feedback and extensive internal deliberations, the ISSB has recently unveiled the finalized S1 and S2 standards. This blog post delves into the key aspects of these standards and their impact on the future of sustainability reporting.

  A Closer Look at the ISSB Standards:

  The S1 standard, titled “General Requirements for Disclosure of Sustainability-related Financial Information,” encompasses broad-based sustainability reporting. It covers a wide range of aspects related to environmental, social, and governance (ESG) pillars. On the other hand, the S2 standard is specifically focused on climate-related disclosures, highlighting the increasing importance of addressing climate change within financial reporting.

  Phased Implementation Approach:

  Recognizing the significant undertaking required for companies to comply with these new standards, the ISSB recommends a phased implementation approach. The initial focus will be on reporting climate-related disclosures, given their paramount importance. This allows companies to gradually acclimate themselves to the requirements before incorporating additional ESG topics outlined in the S1 standard. It is worth noting that both standards become active simultaneously, with climate issues taking center stage.

  Effective Date and Global Adoption:

  The ISSB has set the effective date for the S1 and S2 standards as the beginning of 2024. However, it is crucial to understand that the ISSB, being an arm of the International Accounting Standards Board (IASB), does not possess legal authority in any specific country. Instead, the ISSB develops globally applicable standards, and individual nations have the choice to adopt them. Similar to accounting rules governed by the IASB, which have been largely adopted worldwide, the ISSB standards are expected to follow a similar path of implementation, albeit with some possible fine-tuning.

  Several nations have already expressed their intention to adopt the ISSB standards, emphasizing their commitment to transparent and comprehensive sustainability reporting. While the exact details of implementation may vary slightly, the overall goal remains aligned – to foster consistent and reliable reporting of sustainability-related financial information. The first reports adhering to the new standards are expected to surface in 2025, marking a significant milestone in the evolution of sustainability reporting.

  The ISSB’s release of the S1 and S2 standards represents a major step forward in enhancing sustainability reporting practices worldwide. These standards provide a structured framework for companies to disclose sustainability-related financial information, with a particular emphasis on climate-related disclosures. As organizations gear up for the phased implementation, it is imperative to embrace these new standards as an opportunity to promote transparency, accountability, and responsible business practices. By adhering to the ISSB standards, companies can proactively contribute to a more sustainable future and gain the trust and confidence of stakeholders across the globe.

  The post Introducing the New ISSB Standards: A Game-Changer for Sustainability Reporting first appeared on Visual Lease.]]> https://visuallease.com/understanding-different-types-of-commercial-leases-exploring-triple-net-and-pass-through-leases/ Fri, 07 Jul 2023 13:28:03 +0000 https://visuallease.com/?p=8108 When it comes to commercial leases, there are various types and terms that can be confusing for both lessors and lessees. Among these terms are “triple net leases,” “pass-through leases,”...
  The post Understanding Different Types of Commercial Leases: Exploring Triple Net and Pass-Through Leases first appeared on Visual Lease.]]> When it comes to commercial leases, there are various types and terms that can be confusing for both lessors and lessees. Among these terms are “triple net leases,” “pass-through leases,” and “bondable leases,” which may vary in naming conventions depending on the region. Understanding the different commercial lease types is essential for both parties involved. In this blog post, we will delve into the meaning of triple net leases and explore various types of commercial leases to shed light on their characteristics and implications.

  Types of Commercial Leases

  In broad terms, commercial leases can be categorized based on what is being paid for and how it is paid. Unlike residential leases, commercial leases typically involve more than just a base rent. Let’s explore the primary lease types:

  1. Gross Lease: A gross lease is similar to renting an apartment for personal use. In this type of lease, the lessor includes all expenses, such as snow removal, lawn maintenance, and hallway lighting, in the rent payment. This is the simplest form of a commercial lease, but it is relatively uncommon in the commercial real estate market.
  2. Triple Net Lease: Triple net leases (NNN leases) are frequently seen in retail leases. In this type of lease, the lessee assumes responsibility for additional expenses beyond the base rent. These expenses typically include common area maintenance (CAM), property taxes, and property insurance. The lessee pays the base rent “net” of these three expense categories. Hence, it is called a triple net lease.
  3. Pass-Through Lease: Pass-through leases, also known as bondable leases, differ slightly from triple net leases. In a pass-through lease, the tenant directly assumes the costs of expenses such as snow removal, landscaping, and property taxes. The tenant reimburses the landlord for these expenses separately from the rent payment. This type of lease is commonly found in freestanding buildings like banks or fast-food restaurants.
  4. Modified Gross Lease: A modified gross lease is often seen in office buildings, combining elements of both gross and net leases. Under this type of lease, operating expenses, property taxes, and insurance are typically included in the initial base year rent. However, any increases in these expenses over the base year are charged to the tenant based on their pro-rata share. The exact terms may vary, specifying either the actual expenses or an increase over a base amount.

  Implications for Lease Accounting

  Understanding the nature of the commercial lease type is essential for proper lease accounting, as it affects how expenses are treated under accounting standards such as FASB, ASC 842, and IFRS 16. While the lease payment represents the amount paid for asset usage, common area maintenance expenses are typically considered variable expenses, separate from the lease component. Taxes are treated similarly, and considered excluded from the lease expense. Lessors should carefully allocate these expenses based on the lease type to accurately report their assets and liabilities.

  Navigating the world of commercial leases involves understanding the various lease types available. Triple net leases, pass-through leases, gross leases, and modified gross leases each have distinct characteristics and implications for both lessors and lessees. Familiarity with these lease types is crucial for making informed decisions and ensuring accurate lease accounting. By grasping the meaning of triple net leases and comprehending the differences between commercial lease types, individuals and businesses can navigate lease agreements more effectively and mitigate potential challenges.

  The post Understanding Different Types of Commercial Leases: Exploring Triple Net and Pass-Through Leases first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-appoints-kathryn-eskandarian-as-chief-finance-officer/ Thu, 06 Jul 2023 13:22:01 +0000 https://visuallease.com/?p=8281 Company continues to demonstrate its commitment to strategic growth and operational excellence Woodbridge, NJ – July 6, 2023 — Visual Lease, the #1 lease optimization software provider, today announced the...
  The post Visual Lease Appoints Kathryn Eskandarian as Chief Financial Officer first appeared on Visual Lease.]]>

  Company continues to demonstrate its commitment to strategic growth and operational excellence

  Woodbridge, NJ – July 6, 2023 — Visual Lease, the #1 lease optimization software provider, today announced the appointment of its first Chief Financial Officer, Kathryn Eskandarian. Having most recently served as the organization’s SVP of Finance and Accounting, Eskandarian has extensive experience building out accounting and finance functions within high-growth SaaS companies. With the introduction of this role to the business, Visual Lease continues to invest in its senior leadership team, having announced the addition of a Chief Customer Officer, Chief Revenue Officer and Chief Product Officer to its C-Suite within the last year.  

  “Working alongside Kathryn, I’ve witnessed her unwavering passion for our company and relentless pursuit of operational excellence in critical functional areas, including Finance, Human Resources, Legal and Information Technology,” said Visual Lease CEO, Robert Michlewicz. “During her time with VL, Kathryn has been instrumental in evolving these pillars of our business on pace with the company’s growth. Her leadership will continue to help drive VL’s success as we further expand our platform and the value that we provide to our growing community of customers and partners.” 

  Eskandarian joined Visual Lease in August 2017 as Director of Finance and Accounting. During her tenure, Visual Lease has experienced double-digit, year-over-year percentage growth in both revenue and customer count. Prior to joining the company, Eskandarian served as the Controller at iCIMS, where she was heavily involved in building the financial infrastructure to scale and support the business, as well as facilitating various equity raises. 

  “Today, finance leaders are relied on to help their organizations prepare for emerging needs and challenges, such as the global sustainability disclosure standards that were recently announced by the International Sustainability Standards Board (ISSB),” said Eskandarian. “I’ve experienced firsthand how critical the ability to adapt to changing market conditions is to business health and success. This knowledge fuels my passion for the work we do to help our customers stay ahead of what’s ahead.” 

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom. 

  About Visual Lease  

  Visual Lease, the #1 lease optimization software provider, empowers organizations to leverage their lease portfolio as a strategic asset. Our platform is uniquely designed to meet the needs of every team that interacts with a company’s lease portfolio to reduce risk, drive confident and sustained lease accounting compliance and provide the visibility required to make agile business decisions. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS and GASB lease accounting standards and implement proper lease controls to improve the financial, legal and operational performance of their leases. Our award-winning software is used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.  

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com     

  The post Visual Lease Appoints Kathryn Eskandarian as Chief Financial Officer first appeared on Visual Lease.]]> https://visuallease.com/vl-esg-steward-shortlisted-by-the-saas-awards-as-best-product-for-csr-sustainability-and-esg/ Wed, 05 Jul 2023 14:16:24 +0000 https://visuallease.com/?p=8214 Carbon accounting, sustainability management and ESG reporting tool receives global recognition on the heels of newly announced international sustainability standards (IFRS S1 and IFRS S2) Woodbridge, NJ – July 5,...
  The post VL ESG Steward™ Shortlisted by The SaaS Awards as Best Product for CSR, Sustainability and ESG first appeared on Visual Lease.]]>

  Carbon accounting, sustainability management and ESG reporting tool receives global recognition on the heels of newly announced international sustainability standards (IFRS S1 and IFRS S2)

  Woodbridge, NJ – July 5, 2023 — Visual Lease, the #1 lease optimization software provider, today announced the company’s newest offering, VL ESG Steward, has been shortlisted for a Software as a Service (SaaS) award within the category of Best SaaS Product for CSR, Sustainability and ESG.

  VL ESG Steward is an ESG reporting tool, and the first of its kind within the lease accounting and administration space, specifically created to help organizations consolidate the records needed to track their carbon footprint across commercial real estate, fleet, equipment and more. The tool empowers users to be able to report on the environmental impact of these assets in accordance with the newly announced sustainability disclosure requirements from The International Sustainability Standards Board (ISSB), IFRS S1 and IFRS S2.

  “ESG reporting remains a top priority for organizations across the globe,” said Visual Lease CEO, Robert Michlewicz. “With Visual Lease’s history of serving as a leading lease record management solution for more than two decades, we are in a unique position to be able to help businesses use this data to go beyond lease accounting compliance to track and report on the environmental impact of their owned and leased assets. Our team is at the forefront of these evolving business needs, and provided guidance on the new international sustainability disclosure standards from the ISSB. We are proud to provide Visual Lease customers with the advantage of being able to confidently report on this data in accordance with the latest requirements.”

  Hundreds of entries were received for The SaaS Awards 2023, the organization’s 8th awards ceremony. VL ESG Steward was evaluated against worldwide submissions from organizations across North America, Canada, Europe, the Middle East, and Australia. The software is recognized alongside solutions from industry leaders such as IBM, IBM Cloud, LineLeader by ChildcareCRM, Submittable, ECM PCB Stator Technology, Diligent Corporation, Wolters Kluwer Enablon, Coats Digital and Avetta.

  Given that nearly 40% of global carbon dioxide emissions originate from real-estate-related assets, Visual Lease extended its platform to help its customers access their lease record data to not only achieve compliance with the evolving requirements, but also to understand – and ultimately transform – the environmental impact of their owned and leased assets.

  “The true power of technology lies in its ability to effectively meet current needs while preparing to address emerging needs, which is a guiding principle for our product development efforts here at Visual Lease,” said Amie Durr, Visual Lease’s Chief Product Officer. “Visual Lease is uniquely positioned to be able to track and report on dynamic financial and operational datasets, which is a core capability to support a carbon accounting program. With these insights readily available, organizations can successfully pave the way for a more sustainable future,” Durr added.

  To learn more about VL ESG Steward, please visit this link.

  About the SaaS Awards
  

  The SaaS Awards is a sister program to the Cloud Awards, which was founded in 2011. The SaaS Awards focus on recognizing excellence and innovation in software solutions. Categories range from Best Enterprise-Level SaaS to Best UX or UI Design in a SaaS Product.

  About Visual Lease
  

  Visual Lease, the #1 lease optimization software provider, empowers organizations to leverage their lease portfolio as a strategic asset. Our platform is uniquely designed to meet the needs of every team that interacts with a company’s lease portfolio to reduce risk, drive confident and sustained lease accounting compliance and provide the visibility required to make agile business decisions. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS and GASB lease accounting standards and implement proper lease controls to improve the financial, legal and operational performance of their leases. Our award-winning software is used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post VL ESG Steward™ Shortlisted by The SaaS Awards as Best Product for CSR, Sustainability and ESG first appeared on Visual Lease.]]> https://visuallease.com/understanding-capital-budgeting-decisions-and-audited-financial-statements/ Wed, 05 Jul 2023 13:20:17 +0000 https://visuallease.com/?p=8107 In the realm of financial management, companies are faced with critical decisions regarding capital budgeting. These decisions involve allocating funds to various investment opportunities.  Additionally, companies often seek the assurance...
  The post Understanding Capital Budgeting Decisions and Audited Financial Statements first appeared on Visual Lease.]]> In the realm of financial management, companies are faced with critical decisions regarding capital budgeting. These decisions involve allocating funds to various investment opportunities. 

  Additionally, companies often seek the assurance of accurate financial information through audited financial statements. In this blog post, we will explore the concept of capital budgeting decisions using accounting software and delve into the significance of audited financial statements.

  Capital Budgeting Decisions and Accounting Software:

  Capital budgeting decisions refer to the process companies undertake to determine where to invest their capital. These decisions involve evaluating the financial implications, both short-term and long-term, of investing in different assets. One common choice is the lease versus buy decision, where companies analyze the total cost of owning or leasing an asset over its life.

  To make informed decisions, companies can leverage accounting software to model and analyze capital budgeting examples. By incorporating various variables and comparing the costs of different options, companies can identify the most suitable investment opportunities. Accounting software enables companies to consider factors such as cash expenditures, loan interest, sales tax, and the impact of leases on the balance sheet and profit-loss statements.

  Audited Financial Statements:

  Financial statements serve as essential tools for communicating a company’s financial performance. While companies can choose to present any form of financial statement, the highest level of confidence comes from audited financial statements. Audited financial statements undergo a thorough review by Certified Public Accountants (CPAs) who assess the accuracy and completeness of the financial information.

  Audits involve not only examining the financial numbers but also evaluating the company’s internal processes and controls. CPAs verify that appropriate steps are taken to prevent errors, fraud, and theft. Through testing and analysis, auditors ensure that finances flow accurately within the company and that the financial reports present a true and fair view of the company’s financial position.

  The Importance of Audited Financial Statements:

  Audited financial statements carry immense significance, particularly for publicly traded companies and larger private enterprises. They provide stakeholders, including investors, creditors, and regulators, with a higher level of assurance regarding the reliability and accuracy of the financial information presented. Audited financial statements include an opinion letter from the CPA firm, which states that, in the opinion of the CPA, the information is properly prepared and presented.

  Capital budgeting decisions and audited financial statements play crucial roles in financial management. Accounting software assists companies in making informed capital budgeting decisions by analyzing costs, modeling scenarios, and comparing alternatives. 

  On the other hand, audited financial statements instill confidence in the accuracy and reliability of a company’s financial information. By subjecting financial statements to rigorous scrutiny, companies demonstrate their commitment to transparency and sound financial management.

  The post Understanding Capital Budgeting Decisions and Audited Financial Statements first appeared on Visual Lease.]]> https://visuallease.com/lease-purchase-options-transforming-leases-into-fixed-assets/ Mon, 03 Jul 2023 13:00:38 +0000 https://visuallease.com/?p=8102 Lease purchase options provide companies with the opportunity to convert a lease into a fixed asset. These options allow lessees to exercise their right to purchase the leased asset during...
  The post Lease Purchase Options: Transforming Leases into Fixed Assets first appeared on Visual Lease.]]> Lease purchase options provide companies with the opportunity to convert a lease into a fixed asset. These options allow lessees to exercise their right to purchase the leased asset during or at the end of the lease term. In this blog post, we will explore how lease purchase options work and the accounting implications they entail, specifically under ASC 842 regulations. Understanding these options is essential for businesses seeking to effectively manage their lease agreements and financial statements.

  The Mechanics of Lease Purchase Options:

  When a company leases an asset, it gains the right to utilize the asset for a specified period. However, there may come a point when the lessee decides to acquire ownership of the asset. While this can be achieved through negotiation with the lessor, many lease agreements incorporate a lease purchase option. This embedded option allows the lessee to purchase the underlying asset under predetermined conditions.

  How Does a Lease Purchase Option Work?

  The lessee can exercise a lease purchase option by notifying the lessor. Typically, the lease agreement specifies a purchase price and a specific time frame during which the option becomes available. While the details may vary from lease to lease, the fundamental principle remains constant—the decision to exercise the option lies solely with the lessee. This option to purchase introduces specific accounting considerations under ASC 842.

  Lease Purchase Options Accounting Implications under ASC 842:

  When a lease includes a purchase option, it must be properly recognized and accounted for according to ASC 842 guidelines. The accounting treatment depends on whether the lessee is likely or not likely to exercise the option. The threshold for “likely to exercise” is relatively high, requiring more than just a higher probability. If deemed likely to exercise, the asset is amortized over its useful life instead of the lease term, which is typically a longer period.

  Bargain Purchase Options:

  A special case of a lease purchase option is a bargain purchase option. This option is structured to give the lessee a strong economic incentive to purchase the asset. Often referred to as a “dollar purchase option,” it allows the lessee to buy the asset for a nominal price at the end of the lease term. However, a bargain purchase option is not limited to a dollar value. If the purchase price is significantly below the asset’s fair value, it is classified as a bargain purchase.

  In the case of a bargain purchase option, accounting rules dictate that it must be accounted for as if the lessee will exercise the option. Regardless of the likelihood of exercise, the asset is amortized over its useful life rather than just the lease term. This accounting treatment ensures that failing to exercise a bargain purchase option would be against the lessee’s economic interests.

  Purchase Election without a Purchase Option:

  In situations where a lease does not have a purchase option, but the lessee elects to purchase the asset at a later stage through an agreement with the lessor, there is a methodology for exercising the purchase price. This includes adjusting the value of the consideration paid and automatically updating the fixed asset register by replacing the intangible right-of-use asset with the value of the asset and accumulated depreciation.

  Lease purchase options offer companies the flexibility to convert leases into fixed assets by exercising their right to purchase the leased asset. Understanding the intricacies of lease purchase options and their accounting implications under ASC 842 is crucial for accurate financial reporting. By effectively managing lease agreements and accounting for lease purchase options, businesses can streamline their lease administration and maintain compliance with accounting standards while making informed decisions regarding asset acquisition.

  The post Lease Purchase Options: Transforming Leases into Fixed Assets first appeared on Visual Lease.]]> https://visuallease.com/fixed-asset-accounting-managing-assets-and-leasehold-improvements/ Wed, 28 Jun 2023 13:00:34 +0000 https://visuallease.com/?p=8100 In the realm of financial accounting, fixed asset accounting holds significant importance for companies. It involves the meticulous tracking and management of owned assets, ensuring their existence, location, and allocation...
  The post Fixed Asset Accounting: Managing Assets and Leasehold Improvements first appeared on Visual Lease.]]> In the realm of financial accounting, fixed asset accounting holds significant importance for companies. It involves the meticulous tracking and management of owned assets, ensuring their existence, location, and allocation within the organization. Additionally, fixed asset accounting intersects with lease accounting, particularly concerning leasehold improvements. This blog post delves into the intricacies of fixed asset accounting, highlighting its role in lease administration and the need for distinct yet integrated systems.

  What is Fixed Asset Accounting?

  Fixed asset accounting revolves around the systematic recording and monitoring of a company’s tangible assets, such as buildings, machinery, equipment, and vehicles. These assets often represent substantial investments and have long-term value for the organization. To efficiently handle fixed asset accounting, companies employ a fixed asset register—a solution that works in tandem with accounting platforms like Visual Lease.

  What are Leasehold Improvements?

  One aspect where fixed asset accounting and lease administration intersect is leasehold improvements. When companies lease premises, they may need to undertake custom work to adapt the space to their specific requirements. These leasehold improvements can range from structural modifications to interior design alterations. The costs incurred in making these improvements, both reimbursed and self-funded, must be accounted for accurately.

  Accounting for Fixed Assets:

  The accurate handling of leasehold improvements becomes crucial when adhering to lease accounting standards such as ASC 842 or IFRS 16. These standards outline the guidelines for recognizing, measuring, and disclosing leases and lease-related expenses. To ensure compliance, the expenses related to leasehold improvements must be appropriately categorized within the lease accounting framework.

  The Role of the Fixed Asset Register:

  Within the fixed asset register, companies need to account for the materials and labor costs associated with leasehold improvements. This allows them to maintain a comprehensive overview of their fixed assets and their respective values. The fixed asset register serves as a repository for recording the financial impact of leasehold improvements, ensuring accurate reporting and compliance with accounting regulations.

  Fixed asset accounting plays a vital role in accurately tracking, managing, and reporting a company’s tangible assets. When combined with lease administration, it becomes even more crucial to accurately account for leasehold improvements and comply with relevant lease accounting standards. By leveraging dedicated fixed asset registers and integrating them with lease accounting platforms, companies can effectively manage their assets, ensure compliance, and streamline financial reporting processes.

  The post Fixed Asset Accounting: Managing Assets and Leasehold Improvements first appeared on Visual Lease.]]> https://visuallease.com/understanding-prepaid-rent-for-asc-842-what-you-need-to-know/ Mon, 26 Jun 2023 13:00:30 +0000 https://visuallease.com/?p=8098 What is Prepaid Rent?  Prepaid rent refers to lease payments made in advance for a future period. It represents an asset on the company’s balance sheet, as the prepayment can...
  The post Understanding Prepaid Rent for ASC 842: What You Need to Know first appeared on Visual Lease.]]> What is Prepaid Rent? 

  Prepaid rent refers to lease payments made in advance for a future period. It represents an asset on the company’s balance sheet, as the prepayment can be utilized to offset rent expenses in the future when it is incurred. By recording prepaid rent, companies ensure accurate accounting of their lease obligations and optimize the allocation of expenses over time.

  Is prepaid rent an asset? 

  Yes, prepaid rent is considered an asset in accounting. When a company pays rent in advance for a future period, it has a prepaid rent amount that represents the right to use the leased property in the future. This prepaid amount is recorded as an asset on the balance sheet. As time passes and the rent expense is incurred, the prepaid rent is gradually recognized as an expense, resulting in a reduction of the prepaid rent asset over time.

  Prepaid Rent under ASC 842

  When it comes to accounting for leases under ASC 842, one area that can be confusing is prepaid rent. Under the previous accounting standard, ASC 840, prepaid rent was recognized as an asset on the balance sheet and expensed over time. However, under ASC 842, there are some key differences to keep in mind.

  1. Prepaid rent is not recognized as such under ASC 842. While you can prepay rent ahead of time, the only time this will be recognized is prior to the commencement of the lease term. In other words, if you prepay rent for a future period, that amount will not be recognized as a prepaid asset on the balance sheet under ASC 842.
  2. Under ASC 842, you will have a right-of-use asset and a lease liability on the balance sheet. The lease liability reflects all of the future payments that you owe under the lease agreement, and the right of use asset represents the right to use the leased asset over the term of the lease. 
  3. If you have prepaid rent under ASC 842, the amount of that prepayment will not be included in the lease liability. However, it will be reflected in the right-of-use asset side. This is because the prepayment has already been made and is considered a reduction of the future lease payments owed.

  Straight-Line Rent Calculations Under ASC 842

  It is important to note that prepaid rent will not impact the straight-line rent calculation. Straight-line rent is an even amount that is applied to every single month, regardless of whether a cash rent payment is made or not. Therefore, when the prepaid rent is applied, there will be no reduction in the lease liability for that month. However, the right-of-use asset will be amortized, which will be recognized as an expense on the income statement.

  It is essential to understand the differences related to prepaid rent under ASC 842 for accurate lease accounting. Properly recognizing prepaid rent can help ensure that your financial statements comply with the new standard and provide an accurate depiction of your company’s financial position. 

  The post Understanding Prepaid Rent for ASC 842: What You Need to Know first appeared on Visual Lease.]]> https://visuallease.com/lease-purchasing-options-and-fixed-assets-understanding-lease-to-own-accounting/ Fri, 23 Jun 2023 13:00:32 +0000 https://visuallease.com/?p=8099 Leasing an asset with the intention to eventually purchase it is a common practice among businesses. Whether it’s an optional purchase at the end of the lease or a bargain...
  The post Lease Purchasing Options and Fixed Assets: Understanding Lease-to-Own Accounting first appeared on Visual Lease.]]> Leasing an asset with the intention to eventually purchase it is a common practice among businesses. Whether it’s an optional purchase at the end of the lease or a bargain purchase price, companies often utilize lease purchasing options to acquire fixed assets. However, understanding the accounting treatment for these lease-to-own scenarios is crucial. In this blog post, we will explore the concept of lease-to-own accounting, highlighting the considerations and implications of fixed asset lease accounting.

  What are the key considerations for lease purchasing options and fixed assets?

  1. Economic Incentives and Intent

  When a lessee intends to exercise an optional purchase or there is a bargain purchase price, it creates an economic incentive for acquiring ownership. Referred to as lease-to-own accounting, this approach assumes eventual ownership at the end of the lease term.

  2. Finance Lease Treatment

  In cases where the lessee intends to exercise an option or there is a bargain purchase price, the lease must be treated as a finance lease. This classification affects the accounting treatment and financial reporting.

  3. Amortization and Useful Life

  Instead of amortizing the right-of-use assets solely over the lease term, lease-to-own accounting involves amortizing the asset’s value over its useful life. The expectation of ownership at the end of the lease justifies a longer amortization period.

  4. Operating Lease Possibility

  If there is an option to purchase, but it is deemed unlikely to be exercised, the lease may still qualify as an operating lease based on specific circumstances. This determination depends on various factors and should be carefully assessed.

  5. Remeasurement and Finance Lease Conversion

  Once the lessee decides to exercise or intends to exercise the purchase option, the lease requires remeasurement. This results in the lease being reclassified as a finance lease, with a longer amortization period.

  6. Fixed Asset Accounting

  After the lease is purchased, the right-of-use asset and any accumulated amortization are reversed from the books. The asset is then transferred to the fixed asset register and accounted for in accordance with established fixed asset accounting practices.

  Make Informed Decisions with Lease-to-Own Accounting

  Understanding lease purchasing options and the associated lease-to-own accounting is vital for businesses considering acquiring fixed assets through leasing arrangements. By correctly accounting for these transactions, companies can ensure accurate financial reporting and align their accounting practices with regulatory requirements. 

  The post Lease Purchasing Options and Fixed Assets: Understanding Lease-to-Own Accounting first appeared on Visual Lease.]]> https://visuallease.com/how-to-prepare-for-esg-reporting-requirements/ Thu, 22 Jun 2023 13:15:50 +0000 https://visuallease.com/?p=8106 Update: On June 26, 2023, The International Sustainability Standards Board (ISSB) announced their first two global sustainability-related disclosure standards in response to widespread demand for better transparency, consistency and reliability...
  The post How to Prepare for ESG Disclosure Requirements: Getting Ready for ISSB, EFRAG, SASB, and SEC Standards first appeared on Visual Lease.]]>

  Update: On June 26, 2023, The International Sustainability Standards Board (ISSB) announced their first two global sustainability-related disclosure standards in response to widespread demand for better transparency, consistency and reliability into sustainability plans and performance. IFRS S1 provides a set of disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term. IFRS S2 establishes the specific requirements for climate-related disclosures.

  While the Standards will ensure that organizations are reporting on robust sustainability data that is both verifiable and comparable, many companies are not yet prepared for the required effort. This blog post details three steps organizations can take to establish a baseline for reporting.

   

  ESG reporting requirements are standards for how a company tracks and reports its Environmental, Social and Governance behavior. Although U.S. requirements have not yet been finalized, it is clear that these requirements will have a significant impact on organizations with the potential to mitigate environmental risk and improve sales through positive brand recognition. 

  Socially conscious investors are the best-known driving force behind an organization’s adoption of ESG reporting, but the practice has been gaining more momentum among regulators in recent years. Recently, The International Sustainability Standards Board (ISSB), a branch of IFRS, announced that businesses should start prioritizing climate-related disclosures. Further ESG regulations from the ISSB, SASB and SEC are also expected to go into effect. Even though Europe is further along on the ESG journey than the U.S. is, many U.S.-based companies are likely already impacted by EU regulations, and there are widespread efforts to implement global regulations.

  However, many organizations are not yet prepared for what’s ahead as it relates to ESG reporting and goal setting. In fact, only 5% of Senior Real Estate executives said their company’s ESG program is fully established. By waiting for regulations to be fully finalized, organizations are placing themselves at a disadvantage. One of the main factors holding companies back is not knowing what their current environmental impact is and how they can make the changes required to get on track. However, finance teams are in a unique position to be able to help their organizations proactively get a handle on their owned and leased assets, providing them with a strong understanding of their environmental impact. 

  This blog post will highlight three ways to get ahead of ESG reporting requirements: 

  Three Ways Finance Teams Can Prepare for ESG Reporting Requirements 

  1. Create an ESG task force

  In order to effectively manage owned and leased assets throughout their entire lifecycle, it is essential for organizations to establish a task force dedicated to Environmental, Social, and Governance (ESG) initiatives. This task force will involve multiple stakeholders, such as finance, real estate, procurement, accounts payable, legal, and others. By clearly defining roles and responsibilities within the task force, organizations can streamline decision-making processes and ensure that the right individuals are involved at each stage.

  One crucial responsibility of the ESG task force is to stay informed about ESG reporting guidance, emerging regulations, and relevant laws. It is important to designate at least one member of the task force to monitor additional updates from regulatory bodies like the Securities and Exchange Commission (SEC) and the ISSB. This individual should possess a comprehensive understanding of key concepts, such as differentiating between scope 1 and 2 emissions. By staying up to date with evolving requirements, the task force can proactively address any necessary changes and maintain compliance.

  Establishing an ESG task force will ensure that your company has a dedicated team focused on tracking, reporting, and fulfilling ESG requirements. This team will play a crucial role in gathering and analyzing data, monitoring progress, and making informed decisions regarding ESG initiatives. By centralizing these efforts, your organization can effectively engage stakeholders and demonstrate its commitment to sustainability and responsible business practices.

  2. Decide how to track and report data long-term

  Implementing a centralized system of record not only empowers organizations to gain insights into their portfolio of owned and leased assets and optimize financial expenditures but also, enables them to track and assess the environmental impact of these assets. By leveraging such a system, organizations can make informed decisions based on real-time data and begin taking steps to mitigate their carbon footprint related to their real estate and equipment leases, as well as owned properties.

  For instance, as a company’s lease approaches its end, they can use the centralized system to compare the carbon emissions of their current leased office space with alternative options. This analysis can help them determine if relocating to a different space could lead to a significant reduction in their carbon footprint. By identifying and selecting environmentally friendly alternatives, organizations can align their operational practices with their sustainability goals and contribute to a more eco-friendly future.

  3. Establish a strong lease controls framework 

  To empower the cross-departmental collaboration required to effectively manage, track, report and analyze owned and leased asset data, organizations must implement dedicated technology. A solution that provides a strong lease controls framework will mitigate the risk of reporting errors, ensure that the right people have the right access to the right information at the right time, and also, provide access to meaningful insights. 

  Virtual Lease recently launched VL ESG Steward to do all this and more. It is the first solution to push real estate, procurement, facilities and finance teams to go beyond portfolio optimization, accounting and compliance to focus on the environmental impact of their assets, projects and processes. 

  ESG Steward is built in accordance with GRI, CSRD, and the Greenhouse Gas Protocol – the global gold standard for ESG and Emissions reporting guidance, ensuring accuracy, consistency and compliance with regulations and enabling organizations to tie hard data to their environmental disclosures with supporting evidence to substantiate claims of progress with confidence.

  For more information on how Visual Lease can help your business get ahead of ESG regulation requirements, schedule time with our team. 

  The post How to Prepare for ESG Disclosure Requirements: Getting Ready for ISSB, EFRAG, SASB, and SEC Standards first appeared on Visual Lease.]]> https://visuallease.com/finance-leases-vs-operating-leases-understanding-the-differences-and-asc-842/ Tue, 20 Jun 2023 13:00:00 +0000 https://visuallease.com/?p=8097 Table of contents: What is a finance lease? What is an operating lease? Key Characteristics of an Operating Lease Finance Leases vs. Operating Leases Understanding finance leases and operating leases...
  The post Finance Leases vs. Operating Leases: Understanding the Differences and ASC 842 first appeared on Visual Lease.]]> Table of contents:
  • What is a finance lease?
  • What is an operating lease?
  • Key Characteristics of an Operating Lease
  • Finance Leases vs. Operating Leases
  • Understanding finance leases and operating leases
  • How does ASC 842 impact lease classification?
  • What is the Expense Profile for Operating vs. Finance Leases?

  Finance leases and operating leases are two common types of lease arrangements that businesses encounter. With the introduction of the ASC 842 accounting standard, the classification and treatment of leases have evolved. In this blog post, we will delve into the distinctions between finance leases and operating leases and discuss how ASC 842 impacts the accounting for these lease types.

  What is a finance lease?

  A finance lease, also known as a capital lease, is a type of lease agreement in which one party, typically a lessor, allows another party, the lessee, to use and control a specific asset for an extended period of time in exchange for lease payments. A finance lease is structured so that the lessee essentially assumes many of the economic benefits and risks associated with owning the leased asset.

  Key Characteristics of a Finance Lease

  1. Ownership Transfer: Finance leases often include an option for the lessee to purchase the asset at the end of the lease term for a nominal amount, commonly referred to as the “bargain purchase option.”
  2. Long-Term Commitment: : Finance leases are generally long-term agreements, often spanning a substantial portion of the asset’s useful life. They are typically structured to match the asset’s economic life.
  3. Risk and Rewards: In a finance lease, the lessee usually takes on the risks and rewards associated with the leased asset. This includes responsibilities like maintenance, insurance, and any potential residual value.
  4. Accounting Treatment: In financial accounting, finance leases are recorded on the lessee’s balance sheet as both an asset and a liability. This is because the lessee is considered to have acquired a significant portion of the economic ownership of the asset.

  Finance Leases vs. Operating Leases

  Finance leases and operating leases differ significantly in their characteristics and accounting treatment. In a finance lease, the lessee often has the option to purchase the asset at the end of the lease term through a “bargain purchase option,” and they take on the risks and rewards of ownership. These leases are typically long-term and are recorded on the lessee’s balance sheet as both assets and liabilities. On the other hand, operating leases are short-term, with the lessor retaining ownership of the asset throughout the lease term. Lease payments for operating leases are generally treated as operating expenses and do not appear on the lessee’s balance sheet. The choice between these two lease types can have a significant impact on a company’s financial statements and decision-making processes.

  Defining Operating Leases

  An operating lease is a type of lease agreement in which one party, known as the lessor (the owner of the asset), allows another party, the lessee, to use and control a specific asset for a defined period of time without transferring ownership of the asset. Operating leases are often used for short-term or non-core assets and typically have more flexibility compared to finance leases.

  What is an operating lease?

  Short-Term: Operating leases are generally short-term agreements, covering a fraction of the asset’s total economic life. They do not typically extend for the entire useful life of the asset.

  Ownership Retained: In an operating lease, the lessor retains ownership of the leased asset throughout the lease term. The lessee does not usually have the option to purchase the asset at the end of the lease period.

  Maintenance and Risk: The lessor is typically responsible for maintaining the asset and bearing the risks associated with ownership, such as changes in the asset’s value.

  Accounting Treatment: From an accounting perspective, operating leases are generally not recognized as assets and liabilities on the lessee’s balance sheet. Instead, lease payments are typically recorded as operating expenses.

  Finance Leases vs. Operating Leases

  Finance leases and operating leases differ significantly in their characteristics and accounting treatment. In a finance lease, the lessee often has the option to purchase the asset at the end of the lease term through a “bargain purchase option,” and they take on the risks and rewards of ownership. These leases are typically long-term and are recorded on the lessee’s balance sheet as both assets and liabilities. On the other hand, operating leases are short-term, with the lessor retaining ownership of the asset throughout the lease term. Lease payments for operating leases are generally treated as operating expenses and do not appear on the lessee’s balance sheet. The choice between these two lease types can have a significant impact on a company’s financial statements and decision-making processes.

  Understanding finance leases and operating leases.

  Under the previous ASC 840 standard, capital leases were categorized as financing arrangements and were recorded on the balance sheet, while operating leases were treated as a right to use the asset and remained off-balance sheet. However, this off-balance sheet accounting approach led to concerns, prompting the transition to the ASC 842 standard.

  How does ASC 842 impact lease classification?

  ASC 842 mandates that both finance leases and operating leases be recognized on the balance sheet. This change ensures greater transparency in lease accounting.

  • In ASC 842, finance leases are now considered right-of-use assets, categorized as intangible assets. Instead of being expensed, these assets are amortized over their useful life. Finance leases also entail the recognition of separate interest expenses, which decline over time as the lease liability decreases.
  • Similar to finance leases, operating leases under ASC 842 involve the recognition of right-of-use assets as intangible assets. However, the key distinction lies in expense recognition. Operating leases are expensed using a straight-line method, where lease payments are evenly distributed over the lease term. This results in a consistent lease expense throughout the lease duration.

  What is the Expense Profile for Operating vs. Finance Leases?

  The expense profile for finance leases differs from that of operating leases. Finance leases have higher expenses in the initial months and progressively decrease as the lease term progresses. On the other hand, operating leases maintain a constant expense level throughout the lease duration.

  Understanding the differences between finance leases and operating leases is essential for businesses navigating lease accounting under ASC 842. With both types of leases now recognized on the balance sheet, organizations can provide more transparent financial reporting. By grasping the nuances of these lease classifications and their respective expense profiles, businesses can comply with accounting standards and make informed decisions regarding lease arrangements.

  The post Finance Leases vs. Operating Leases: Understanding the Differences and ASC 842 first appeared on Visual Lease.]]> https://visuallease.com/unraveling-off-balance-sheet-financing-understanding-its-impact-and-asc-842/ Fri, 16 Jun 2023 13:56:34 +0000 https://visuallease.com/?p=8096 Table of Contents What is Off-Balance Sheet Financing? ASC 842 Impact on Reporting Leases Importance of On-Balance Sheet Reporting Legal Regulations: The SEC’s Strict Stance Off-balance sheet financing refers to...
  The post Unraveling Off-Balance Sheet Financing: Understanding Its Impact and ASC 842 first appeared on Visual Lease.]]> Table of Contents
  • What is Off-Balance Sheet Financing?
  • ASC 842 Impact on Reporting Leases
  • Importance of On-Balance Sheet Reporting
  • Legal Regulations: The SEC’s Strict Stance

  Off-balance sheet financing refers to financial arrangements that are not reflected on a company’s balance sheet. Historically, operating leases were a prime example of off-balance sheet financing, where lease obligations were footnoted rather than recorded as liabilities. However, due to concerns surrounding transparency and misleading financial reporting, regulatory bodies like the FASB and the SEC have introduced measures to bring off-balance sheet items onto the balance sheet. In this blog post, we will explore the concept of off-balance sheet financing, its implications, and the influence of ASC 842 on lease accounting.

  What is Off-Balance Sheet Financing?

  Off-balance sheet financing encompasses financing arrangements that do not appear as liabilities or assets on a company’s balance sheet. This practice can create challenges in accurately assessing a company’s financial health and obligations. While some companies used off-balance sheet financing to manage their debt coverage ratios or ease their reporting workload, prominent cases of abuse and fraud, such as Enron, prompted regulatory actions to address these concerns.

  ASC 842 and On-Balance Sheet Leases.

  Under ASC 842, both operating leases and finance leases are now required to be recorded on the balance sheet, with limited exceptions for leases. The goal is to enhance transparency and provide investors with a comprehensive view of a company’s financial obligations. Companies are expected to comply with Generally Accepted Accounting Principles (GAAP) and disclose any non-GAAP financing, even if it is not reflected on the balance sheet.

  Importance of On-Balance Sheet Reporting.

  Bringing leases onto the balance sheet enables stakeholders to assess a company’s financial position more accurately. It eliminates potential distortions caused by off-balance sheet financing, allowing investors, creditors, and analysts to make informed decisions based on reliable financial information. The increased disclosure requirements ensure that companies are transparent about their financial commitments and avoid misleading practices.

  Legal Regulations: The SEC’s Strict Stance.

  The SEC has taken a stringent approach to off-balance sheet financing. Recent comments on company financial statements indicate a heightened focus on non-GAAP transactions. Companies are advised to exercise caution and maintain compliance with accounting standards to avoid repercussions and maintain investor trust. Non-compliance may lead to increased scrutiny and potential legal consequences.

  Off-balance sheet financing, once prevalent in operating leases, has undergone significant changes with the introduction of ASC 842. By requiring companies to include lease obligations on the balance sheet, transparency and accuracy in financial reporting have improved. While there are limited exceptions for short-term leases, the overall trend is toward greater disclosure and accountability. Companies should adhere to GAAP guidelines, disclose non-GAAP transactions, and stay updated with regulatory requirements to foster trust and provide stakeholders with a comprehensive understanding of their financial position.

  Ready to Streamline Your Lease Accounting under ASC 842?

  The transition from off-balance sheet financing to on-balance sheet reporting under ASC 842 represents a significant shift in lease accounting. Companies should prioritize adherence to Generally Accepted Accounting Principles (GAAP) and stay vigilant about regulatory requirements to avoid legal consequences and maintain investor confidence. With tools like Visual Lease, you can simplify the process and ensure that your lease data is managed efficiently and accurately.

  The post Unraveling Off-Balance Sheet Financing: Understanding Its Impact and ASC 842 first appeared on Visual Lease.]]> https://visuallease.com/lease-controls-for-business-success/ Thu, 15 Jun 2023 15:08:41 +0000 https://visuallease.com/?p=8093 From Compliance to Optimization: Harnessing Lease Controls for Business Success Lease accounting standards implemented over the last few years (ASC 842, IFRS 16, GASB 87) require all organizations, whether they...
  The post Lease Controls for Business Success | Visual Lease first appeared on Visual Lease.]]> From Compliance to Optimization: Harnessing Lease Controls for Business Success

  Lease accounting standards implemented over the last few years (ASC 842, IFRS 16, GASB 87) require all organizations, whether they be private, public or government entities, to account for their leases on the balance sheet. This paradigm shift has ushered in a more comprehensive reporting process, demanding greater attention to detail from finance teams across industries.

  While for many, the path toward achieving lease accounting compliance was a challenging one, it has also put organizations in a position to take advantage of their lease management practices and implement a strong lease controls framework. In doing so, they will recognize substantial business benefits, including:

  Maximized Value and Reduced Costs

  Real estate leases are an expensive portfolio of holdings for any business. On average, retailers spend about 11% of their annual gross sales on rent, according to data from NewMark Merrill, and office users can spend up to 20% of their business revenue on rent. Rent fees are just part of the cost structure of a lease. Most businesses will spend $2.14 per square foot on energy consumption, $2.15 per square foot on maintenance and $1.68 on cleaning – as real estate costs increase, business operating costs increase in step. 

  Although real estate equates to significant cost expenditures, businesses rarely know the true extent. Research from the Visual Lease Data Institute (VLDI) found that 71% of organizations are not confident they know the full cost of their leases. Technology-backed lease controls – defined as policies and procedures designed to prevent or detect unauthorized acquisition, use or disposition of these assets – can change that. 

  When organizations have proper systems and processes designed to safeguard and manage their leases, they will gain insight into the full value and cost of each lease, allowing them to be proactive in responding to lease obligations, like maintenance responsibilities, rate increases and CAM charges, as well as understanding termination rights if a lease isn’t working for or benefiting the business. In addition, proper lease control systems can help businesses save money. Data from Accenture shows that proper real estate optimization, which can only be achieved with strong lease controls in place, results in annual real estate operating expense reductions in the 12 – 20% range.

  Streamlined Processes and Reallocated Resources

  Sustained lease accounting compliance takes an enormous effort for finance and compliance teams as they attempt to keep track of all the moving parts and pieces of their organization’s lease portfolio. By implementing dedicated lease management technology that provides a customizable lease controls framework, organizations will greatly simplify their lease management and reporting processes.  

  In fact, a 2022 VLDI survey shows private companies save an average of 600 hours when utilizing lease accounting software to manage lease controls. This is particularly valuable in light of the severe shortage of accounting professionals. 

  A 2021 report from The American Institute of Certified Public Accountants found that fewer people are entering the accounting field with bachelor’s degree candidates down 2.8% and master’s degree candidates down 8.4%. Still, three-quarters of companies plan to continue to hire new graduates at the same rate each year. Implementing technology that facilitates strong lease controls can lessen the time spent on manual tasks and empower accounting and finance teams to tackle more strategic work, helping businesses address the talent shortage by better utilizing their existing resources.

  Increased Focus on Business Objectives and Growth

  The Visual Lease Data Institute found that 45% of companies have overpaid rent or expenses due to inadequate lease controls, meaning they’re not properly managing, tracking and analyzing these agreements. In many cases, this cavalier approach can compromise an organizations’ ability to grow in what are already challenging economic times. 

  Businesses with technology that supports proper lease controls can better respond to market real estate availability, create a real estate strategy that reflects their needs and gain an upper hand in negotiations without the pressure of time constraints. With a functional and targeted real estate strategy, companies and government entities will improve operations, minimize capital expenditures and realize organizational growth. 

  The post Lease Controls for Business Success | Visual Lease first appeared on Visual Lease.]]> https://visuallease.com/fixed-asset-accoutning-leasehold-improvements/ Tue, 30 May 2023 15:48:17 +0000 https://visuallease.com/?p=8057 Fixed Asset Accounting: Managing Assets and Leasehold Improvements In the realm of financial accounting, fixed asset accounting holds significant importance for companies. It involves the meticulous tracking and management of...
  The post Fixed Asset Accounting: Leasehold Improvements first appeared on Visual Lease.]]>

  Fixed Asset Accounting: Managing Assets and Leasehold Improvements

  In the realm of financial accounting, fixed asset accounting holds significant importance for companies. It involves the meticulous tracking and management of owned assets, ensuring their existence, location, and allocation within the organization. Additionally, fixed asset accounting intersects with lease accounting, particularly concerning leasehold improvements. This blog post delves into the intricacies of fixed asset accounting, highlighting its role in lease administration and the need for distinct yet integrated systems.

  What is Fixed Asset Accounting?

  Fixed asset accounting revolves around the systematic recording and monitoring of a company’s tangible assets, such as buildings, machinery, equipment, and vehicles. These assets often represent substantial investments and have long-term value for the organization. To efficiently handle fixed asset accounting, companies employ a fixed asset register—a solution that works in tandem with accounting platforms like Visual Lease.

  What are Leasehold Improvements?

  One aspect where fixed asset accounting and lease administration intersect is leasehold improvements. When companies lease premises, they may need to undertake custom work to adapt the space to their specific requirements. These leasehold improvements can range from structural modifications to interior design alterations. The costs incurred in making these improvements, both reimbursed and self-funded, must be accounted for accurately.

  Accounting for Fixed Assets:

  The accurate handling of leasehold improvements becomes crucial when adhering to lease accounting standards such as ASC 842 or IFRS 16. These standards outline the guidelines for recognizing, measuring, and disclosing leases and lease-related expenses. To ensure compliance, the expenses related to leasehold improvements must be appropriately categorized within the lease accounting framework.

  The Role of the Fixed Asset Register:

  Within the fixed asset register, companies need to account for the materials and labor costs associated with leasehold improvements. This allows them to maintain a comprehensive overview of their fixed assets and their respective values. The fixed asset register serves as a repository for recording the financial impact of leasehold improvements, ensuring accurate reporting and compliance with accounting regulations.

  Fixed asset accounting plays a vital role in accurately tracking, managing, and reporting a company’s tangible assets. When combined with lease administration, it becomes even more crucial to accurately account for leasehold improvements and comply with relevant lease accounting standards. By leveraging dedicated fixed asset registers and integrating them with lease accounting platforms, companies can effectively manage their assets, ensure compliance, and streamline financial reporting processes.

  The post Fixed Asset Accounting: Leasehold Improvements first appeared on Visual Lease.]]> https://visuallease.com/esg-in-real-estate-and-industry-changes/ Mon, 15 May 2023 13:13:31 +0000 https://visuallease.com/?p=8026 ESG and the Future of Real Estate: How Sustainability is Changing the Industry The real estate industry is undergoing a significant transformation as sustainability becomes a top priority for investors...
  The post ESG in Real Estate & Industry Changes first appeared on Visual Lease.]]>

  ESG and the Future of Real Estate: How Sustainability is Changing the Industry

  The real estate industry is undergoing a significant transformation as sustainability becomes a top priority for investors and stakeholders. Environmental, social, and governance (ESG) factors are now being considered in real estate valuation, and investors are using ESG data to make informed decisions about asset performance. In this blog post, we will explore how sustainability is changing the real estate industry and what investors need to know about ESG.

  What ESG Factors are being considered in real estate valuation?

  ESG is gaining importance among capital providers, and investors are using ESG data to evaluate the sustainability of real estate assets. ESG factors such as energy efficiency, water conservation, and waste reduction are now being considered in real estate valuation, and buildings that meet sustainability standards are more attractive to investors.

  1. Energy efficiency: Investors are looking for energy-efficient buildings with low carbon footprints. This includes buildings with efficient HVAC systems, LED lighting, and renewable energy sources.
  2. Water conservation: Investors are also looking for buildings that conserve water and have efficient water management systems. This includes buildings with low-flow fixtures, rainwater harvesting systems, and water-efficient landscaping.
  3. Waste reduction: Investors are looking for buildings that have effective waste management systems and reduce waste through recycling and composting.
  4. Social impact: Investors are looking for buildings that have a positive social impact on the community. This includes buildings that provide affordable housing, support local businesses, and promote diversity and inclusion.
  5. Governance: Investors are looking for buildings that have strong governance structures and ethical leadership. This includes buildings that have transparent reporting, strong risk management, and effective stakeholder engagement.

  ESG is becoming a material risk and opportunity for real estate investors and other stakeholders. As climate change and other sustainability issues become more pressing, investors are looking for ways to future-proof their assets against shocks and disruptions. This means that real estate managers must take a proactive approach to sustainability and change their assets to meet ESG standards.

  How is ESG driving innovation in the real estate industry?

  Developers and investors are exploring new technologies and strategies to reduce the environmental impact of buildings and improve their sustainability. Here are the top 5 ESG-related technologies becoming more common in new real estate developments.

  1. Solar panels: Solar panels are a popular way to generate renewable energy and reduce a building’s carbon footprint. They can be installed on rooftops or as standalone structures and can provide a significant portion of a building’s energy needs.
  2. Efficient lighting: LED lighting is becoming more common in real estate developments as it is more energy-efficient than traditional lighting. Smart lighting systems can also be used to optimize energy use and reduce waste.
  3. Insulation: Proper insulation is essential for reducing energy consumption and improving a building’s energy efficiency. Insulation materials such as spray foam, cellulose, and fiberglass can be used to reduce heat loss and improve indoor air quality.
  4. Smart technology: Smart technology can be used to optimize energy use and reduce waste. For example, smart thermostats can be used to regulate heating and cooling systems, while smart sensors can be used to monitor energy use and identify areas for improvement.
  5. Tankless water heaters: Tankless water heaters are becoming more common in real estate developments as they are more energy-efficient than traditional water heaters. They can provide hot water on demand and reduce energy consumption by up to 30%.

  What are the benefits of embracing ESG in real estate? 

  According to the US Green Building Council, green buildings cost 2% more to build on average, but they save 14% to 19% in operational expenditures. This means that while the upfront costs of green technology may be higher, the lifetime savings can be significant.

  Energy-efficient systems can help reduce utility bills, while sustainable features can increase a building’s resale value. In fact, building owners are seeing a 10% or greater increase in property value after investing in green buildings. Additionally, sustainable real estate investments have been shown to outperform traditional real estate investments in terms of risk-adjusted returns.

  If you’re looking for a solution to track ESG reporting across your real estate portfolio, check out VL’s ESG Steward.

   

  The post ESG in Real Estate & Industry Changes first appeared on Visual Lease.]]> https://visuallease.com/related-party-leases-under-asc842/ Wed, 10 May 2023 12:42:44 +0000 https://visuallease.com/?p=7981 Related Party Leases under ASC 842 Recently, the Financial Accounting Standards Board (FASB) introduced new rules and clarifications regarding the treatment of related party leases under ASC 842. Although these...
  The post Related Party Leases under ASC 842 first appeared on Visual Lease.]]>

  Related Party Leases under ASC 842

  Recently, the Financial Accounting Standards Board (FASB) introduced new rules and clarifications regarding the treatment of related party leases under ASC 842. Although these rules apply to all related party leases, their impact is most significant for private business entities. This blog post aims to provide an overview of these developments and highlight the key considerations for companies navigating related party leases under ASC 842.

  Related Party Leases: Key Considerations

  1. Putting Agreements in Writing: FASB has introduced a crucial change requiring companies to document related party leases explicitly. Previously, private businesses often treated these leases informally to cut costs. The original rule required examining legally enforceable terms, leading to expensive attorney opinion letters. FASB’s amendment allows companies to account for related party leases based on the terms written in a simple agreement, simplifying compliance.
  2. Accounting for Leasehold Improvements: Under ASC 842, related party leases involving leasehold improvements face important considerations. Previously, if the improvements had a longer lifespan than the lease term, it could result in accelerated write-offs and unusual expenses. The current standard allows companies to amortize leasehold improvements over their useful life. If the related party lease ends before the improvements’ useful life, adjusting entries are made to align the books properly. This prevents excessive burden on the subleasing company’s financial statements.

  3 Considerations for Related Party Leases Under ASC 842

  When considering related party leases under ASC 842, here are the top three things to keep in mind:

  1. Document the Agreement: Regardless of the complexity or length, it is essential to put related party lease agreements in writing. This documentation should cover the majority of the terms agreed upon by the related parties. By formalizing the lease agreement, companies can ensure compliance with the accounting standards and avoid unnecessary complications.
  2. Accounting for Leasehold Improvements: If the related party lease involves leasehold improvements with a longer lifespan than the lease term, companies should amortize the costs of these improvements over their useful life. This approach prevents accelerated write-offs and unusual expense patterns. In case the lease terminates before the completion of the improvements’ useful life, adjusting entries should be made to align the books accordingly.
  3. Seek Professional Guidance: Given the complexity of accounting standards and the potential impact on financial statements, it is advisable to consult with accounting professionals or experts familiar with ASC 842. They can provide valuable insights and guidance tailored to the specific circumstances of related party leases.

  Implications of Related Party Leases for Private Businesses

  The recent developments introduced by FASB regarding related party leases under ASC 842 have significant implications, particularly for private business entities. By ensuring that related party leases are properly documented and by accounting for leasehold improvements in line with the rules, companies can comply with the standards while maintaining accurate and transparent financial reporting. Seeking professional guidance is crucial to navigating these accounting complexities effectively. By staying informed and adhering to the updated rules, businesses can mitigate risks and make sound financial decisions in the context of related party leases.

  If your organization is struggling with sustainable ASC 842 compliance, you’re not alone.  Join the thousands of companies that have switched to Visual Lease to confidently maintain compliance.

   

  The post Related Party Leases under ASC 842 first appeared on Visual Lease.]]> https://visuallease.com/gaap-vs-tax-accounting-financial-reporting/ Tue, 02 May 2023 20:49:55 +0000 https://visuallease.com/?p=7964 GAAP vs. Tax Accounting: Navigating the Complexities of Financial Reporting With the introduction of ASC 842, some private companies are struggling with the requirement to record the vast majority of...
  The post GAAP vs. Tax Accounting: Financial Reporting first appeared on Visual Lease.]]>

  GAAP vs. Tax Accounting: Navigating the Complexities of Financial Reporting

  With the introduction of ASC 842, some private companies are struggling with the requirement to record the vast majority of their leases to the balance sheet. As a result, some organizations are turning to tax basis to file statements instead of following the new lease accounting rules.

  GAAP (Generally Accepted Accounting Principles) and tax accounting are two different sets of accounting standards that companies are required to follow. While both are used to report financial information, they have different purposes and requirements.

  What is GAAP?

  GAAP is the set of rules and guidelines that publicly traded companies in the United States must follow when preparing financial statements for external stakeholders, such as investors, creditors, and regulators. GAAP principles are designed to ensure that financial statements are accurate, complete, and comparable across companies.

  What is Tax Accounting?

  On the other hand, tax accounting is used to calculate a company’s tax liability to the government. The Internal Revenue Service (IRS) requires companies to report their taxable income based on the tax code and regulations, which can differ significantly from GAAP principles.

  GAAP vs. Tax Accounting

  The main difference between GAAP and tax accounting is their objectives. While GAAP is focused on providing accurate financial information to external stakeholders, tax accounting is focused on complying with tax laws and regulations. This difference in objectives can lead to discrepancies between the two accounting methods, making it difficult to reconcile financial information.

  What are some examples of discrepancies between GAAP and tax accounting?

  • Timing of revenue: GAAP requires revenue to be recognized when it is earned, regardless of when it is received. On the other hand, tax accounting requires revenue to be recognized when it is received, regardless of when it is earned. This can create discrepancies in revenue recognition between the two methods, leading to different reported profits.
  • Treatment of depreciation: GAAP allows for different depreciation methods, such as straight-line or accelerated depreciation, based on the useful life of the asset. Tax accounting, however, requires companies to use specific depreciation methods, such as the Modified Accelerated Cost Recovery System (MACRS), which can differ from GAAP methods.

  These differences between GAAP and tax accounting can create challenges for companies when reconciling financial information. Companies must ensure that their financial statements are accurate and complete, while also complying with tax laws and regulations. This can require significant resources and expertise, as well as the use of specialized software and tools to manage the complexity of the reconciliation process.

  Additionally, tax basis financial statements may not be accepted by all users, such as lenders and investors, who may require GAAP financial statements. Private companies that use tax basis financial statements may need to provide additional disclosures to explain the differences between tax basis and GAAP financial statements.

  Finding The Right Technology:  GAAP Accounting Software

  The biggest challenge in accounting, regardless of whether it is GAAP vs. tax accounting, is tracking down data, managing changes, and maintaining controls.  Managing leases, for example, can be a challenging and complex process, regardless of the accounting basis used.

  • For example, if a company is using GAAP accounting, they need a lease management system that can track and manage lease data in accordance with GAAP principles.
  • Similarly, if a company is using tax accounting, they need a system that can handle the specific tax regulations and requirements related to lease transactions.

  Companies must have strong controls and processes in place to ensure that their lease accounting and management data is accurate and up to date. Companies may need to invest in specialized software and tools to manage the complexity of lease accounting and ensure compliance with accounting methods.

   

   

  The post GAAP vs. Tax Accounting: Financial Reporting first appeared on Visual Lease.]]> https://visuallease.com/accrued-rent-and-deferred-rent-in-asc842/ Fri, 28 Apr 2023 18:32:59 +0000 https://visuallease.com/?p=7956 Table of Contents What is Accrued Rent? What is Deferred Rent? Accrued Rent vs. Deferred Rent: What’s the difference? Accrued Rent Example Deferred Rent Example Key Considerations for Rent Accounting...
  The post Accrued Rent and Deferred Rent in ASC 842 first appeared on Visual Lease.]]>

  Table of Contents

  • What is Accrued Rent?
  • What is Deferred Rent?
  • Accrued Rent vs. Deferred Rent: What’s the difference?
  • Accrued Rent Example
  • Deferred Rent Example
  • Key Considerations for Rent Accounting under ASC 842

  Understanding Accrued Rent and Deferred Rent in ASC 842 Accounting

  Rent is one of the largest expenses that companies face, and it’s critical to properly account for it. Under the new accounting standard ASC 842, there are some changes to how rent is accounted for. Two important concepts to understand in rent accounting are 1. accrued rent and 2. deferred rent. In this post, we will explore what these terms mean, the difference between them, and what to keep in mind when it comes to rent accounting under ASC 842.

  What is Accrued Rent?

  Accrued rent is a type of rent expense that has been recognized but not yet paid. It represents the difference in timing between paying rent and the actual cash payment of rent. In a traditional straight-line application, rent is expensed equally across the lease’s entire term. However, the actual rent payments made may vary depending on the lease agreement. In some cases, the rent may be expensed when no rent is paid, resulting in accrued rent.

  Accrued rent is a liability under the ASC 840 methodology, but under ASC 842, there is no accrued rent. This is because there is already an asset and a liability recorded for the lease under the new standard.

  What is Deferred Rent?

  Deferred rent is the difference between the amount of rent paid and the rent expense. In a straight-line rent application, the rent paid in the early months of the lease is less than the rent paid in later months. This results in deferred rent, which is recorded as a liability on the balance sheet.

  Accrued Rent vs. Deferred Rent: What’s the difference? 

  Accrued rent and deferred rent are both accounting concepts that relate to the timing of rent payments and rent expense recognition, but they represent different scenarios.  Accrued Rent represents a difference in timing, whereas Deferred Rent represents a difference of amount in the period.

  Under the new lease accounting standard, ASC 842, accrued rent is not recognized separately as a liability because the right-of-use asset recognized on the balance sheet already reflects the straight-line rent expense. The difference between the right-of-use asset and lease liability represents the deferred rent or prepaid rent.

  Accrued Rent Example

  Consider a scenario where a company enters into a lease agreement for office space at $10,000 per month. The lease agreement requires payment at the end of each quarter. At the end of the first month, the company accrues $10,000 as rent expense because it has utilized the office space for that period. However, the actual payment of rent doesn’t occur until the end of the quarter. Therefore, at the end of each month, the accrued rent increases by $10,000 until the payment is made at the end of the quarter.

  Deferred Rent Example

  Imagine a company signs a lease for equipment with a total lease term of five years. The lease agreement stipulates that the monthly rent for the first year is $1,000, but it gradually increases by $100 each year thereafter. In this case, the company pays $1,000 per month in rent, but the rent expense recognized in the early years is lower than the actual rent paid due to the gradual increase. Consequently, the difference between the rent paid and the rent expense recognized constitutes deferred rent, which accumulates over the lease term.

  These examples illustrate the distinction between accrued and deferred rent and how they manifest in real-world lease agreements. Understanding these concepts is crucial for accurate financial reporting under ASC 842 accounting standards. For further insights into accrued and deferred expenses, refer to the article here.

  Key Considerations for Rent Accounting under ASC 842

  Rent accounting under ASC 842 can be complex and requires careful consideration. Here are some key things to keep in mind:

  1. Identify lease arrangements: The first step is to identify all lease arrangements, including embedded leases, and determine if they meet the criteria for recognition under ASC 842.
  2. Determine lease term: The lease term is the period during which the lessee has the right to use the leased asset. It includes the non-cancellable period of the lease plus any periods covered by options to extend or terminate the lease if they are likely to be exercised.
  3. Determine lease payments: Lease payments include fixed payments, variable payments based on an index or rate, and any other amounts the lessee is required to pay under the lease.  Not all are included in the calculation of the Lease Liability and Right of Use Asset.  The details of the lease agreement and your accounting elections will determine the proper payments to include.
  4. Calculate lease liability: The lease liability is the present value of lease payments, discounted using the lessee’s incremental borrowing rate. Private business entities have the option to use a risk-free rate in place of the incremental borrowing rate.  This represents the obligation to make lease payments over the lease term.
  5. Calculate right-of-use asset: The right-of-use asset is the lease liability plus any initial direct costs and lease payments made before the lease commencement date. Lease incentives, deferred, and accrued rent can also impact the right-of-use asset value.  It represents the lessee’s right to use the leased asset over the lease term.
  6. Recognize lease expense: If the lease is an operating lease, the lease expense is recognized on a straight-line basis over the lease term, unless there is a more appropriate basis for allocation.   If the lease is a finance lease, the lease expense is recognized as straight-line amortization of the right-of-use asset plus the period interest expense.

  Overall, rent accounting under ASC 842 requires a detailed analysis of lease arrangements, lease terms, and lease payments, as well as careful consideration of transition requirements. It is important for entities to have robust processes and systems in place to ensure compliance with the standard.

   

   

  The post Accrued Rent and Deferred Rent in ASC 842 first appeared on Visual Lease.]]> https://visuallease.com/why-lease-management-shouldnt-be-ignored/ Wed, 26 Apr 2023 12:51:42 +0000 https://visuallease.com/?p=7951 “Why Lease Management Shouldn’t Be Ignored: The High Cost of Underestimating Your Lease Portfolio and How to Optimize It for Your Business Needs” Many companies are underestimating the total cost...
  The post Why Lease Management Shouldn’t Be Ignored first appeared on Visual Lease.]]>

  “Why Lease Management Shouldn’t Be Ignored: The High Cost of Underestimating Your Lease Portfolio and How to Optimize It for Your Business Needs”

  Many companies are underestimating the total cost of their lease portfolio when in reality, leases are often the second largest expense for organizations with most businesses spending 5% to 10% of total revenue per square foot on rent. And in accordance with lease accounting standards (ASC 842, IFRS 16 and GASB 87), companies must now account for these expensive assets on the balance sheet, further emphasizing just how critical it is for business leaders to keep close tabs on these complex agreements.

  While it’s undeniable that leases are a critical part of businesses’ operations and financial reporting, many organizations wrongly assume that once executed, their work on these agreements is done. However, failing to invest in ongoing lease management and controls typically results in excess costs and overutilization of leased assets, such as real estate. For example, a recent survey from Accenture found that companies today could reduce spatial needs by as much as 40% – which could free up funds that could be allocated elsewhere.

  3 Steps to Optimize the Value of Your Lease Portfolio

  There are 3 key steps that companies can take to optimize the value of their lease portfolio to best serve their organization’s needs: 

  1. Gather & Evaluate Your Leases
  

  Corporate leases have a lot of components, from the basics like rental rate and lease terms to maintenance obligations, utilities, and employee utilization rates. With so many components to keep track of, 71% of companies have reported that they are not confident about the complete cost of their lease, and a startling 90% of senior real estate executives feel they do not have access to all the data they need to make informed decisions about their company’s lease portfolio. These statistics are alarming when you consider that leases are typically the  second-largest expense for most businesses.

  To get full control over your portfolio, first take stock of all real estate and equipment leases within your organization, which are likely scattered in various locations and departments within your company. Thoroughly review each component, including terms and responsibilities, like common-area maintenance fees, insurance minimums, and deferred maintenance.

  2. Utilize Technology
  

  While businesses successfully utilize Excel to tackle many different needs, the fact of the matter is  those spreadsheets simply can’t accommodate how intricate and dynamic leases are, which inevitably leads to major reporting errors.  Once you’ve gathered all your leases, consider investing in dedicated technology that is  purpose-built to help you manage all the moving parts and pieces of your leases throughout their entire lifetime.

  The Visual Lease Data Institute found that currently, 83% of companies are not prioritizing investments in the dedicated technology, people, and processes needed to successfully manage their lease-related expenses despite the fact that in a 2022 report, 45% of companies reported that using lease accounting software decreased associated costs. A similar survey from EY found that a technology-paired lease management program unlocked constrained resources and helped employees focus on high-value tasks, a major benefit when today, many organizations are being asked to do more with fewer resources.

  Technology is permeating throughout organizations because of its benefits in streamlining processes and driving efficiency, and the same benefits can be gained by infusing technology into lease management and accounting practices.

  3. Implement Strong Lease Controls
  

  Research from Deloitte found that companies utilizing cross-departmental collaboration could better respond to a broad range of challenges and were more likely to achieve digital maturity. Given how collaborative lease management is, an internal cross-functional task force should lead the efforts to evaluate solutions and ensure the technology is a good fit across departments that commonly interact with a lease portfolio, including real estate, legal, procurement, IT, and finance and accounting.

  Once the right technology has been identified, you should work with your internal teams and solution provider to implement lease controls and align them to your existing systems. Doing so will ensure that the right people have the right access to your lease data at the right time, which will decrease your organization’s chances of missing deadlines or options, miscalculating lease costs, overpaying, overlooking important deadlines and missing the opportunity to exercise options. Amid the changing economic environment, businesses are focused on improving operational performance to weather the storm. An optimized lease portfolio gives companies the opportunity to respond and adapt to market changes and stay ahead of competitors – a vital asset during a bear run. To learn more about lease management, click here.

   

  The post Why Lease Management Shouldn’t Be Ignored first appeared on Visual Lease.]]> https://visuallease.com/the-evolution-of-leasing-4-trends-to-expect-in-2023/ Tue, 25 Apr 2023 15:49:42 +0000 https://visuallease.com/?p=7948 The ongoing effects of the pandemic, evolving workplace trends and unique economic circumstances have driven businesses to reconsider how and why they enter into new leases.  But how exactly are...
  The post The Evolution of Leasing: 4 Trends to Expect in 2023 first appeared on Visual Lease.]]>

  The ongoing effects of the pandemic, evolving workplace trends and unique economic circumstances have driven businesses to reconsider how and why they enter into new leases.  But how exactly are companies adapting? Better yet, what are the implications of these new behaviors?

  A recent study from The Visual Lease Data Institute (VLDI) answers all these questions and more:

  1. Organizations are prioritizing lease terms that enable adaptability.

  The pandemic has changed how companies operate, and as a result, many have found themselves locked into leases for space that they no longer require.

  To combat this challenge, nearly 88% of companies report that they are planning for physical space needs only one year or less in advance, which is a 151% increase from 2022. The majority of real estate executives have also reported that their businesses were planning to add space as a part of their 2023 real estate strategy – but more than half (52%) of these companies are planning for some or all of this space to be in the form of new satellite locations.

  What does this all mean? Organizations value the ability to revisit lease agreements, negotiate flexible terms and explore alternative real estate options that align with their evolving business strategies.

  2. Business leaders are focused on new workforce needs.

  Business leaders are also looking for leases that support their ability to accommodate remote or hybrid work arrangements – something that has become a “must-have” for many when considering job opportunities. In fact, a 2022 survey by McKinsey found that the third-most-popular reason employees looked for a new job was to find a flexible working arrangement.

  To remain competitive in the job market, companies are reimagining how they utilize their available space. Forty-six percent of surveyed senior real estate executives say that shared desks or offices that can be booked as needed by workers provide the best office environment for their companies. The ability to sublease, communal building amenities and flexible lease termination were also identified as top priorities for companies, ideally providing business leaders with options when it comes to how and where they occupy physical space.

  By entering into lease agreements that provide these various possibilities, companies are more likely to be able to pivot to appeal to existing and potential employees.

  3. Poor lease management continues to cost companies… big time.

  It’s no secret that mismanaged leases can lead to expensive mistakes. In fact, 45% of senior real estate executives admit that their companies have overpaid rent or expenses due to inadequate lease controls. Further underscoring the need for strong lease management practices is the reality that lease accounting standards (ASC 842, GASB 87 and IFRS 16) require companies to accurately represent their leases on the balance sheet. Without controls in place, businesses open themselves up to the very real risk of regulatory scrutiny and costly fines or audits.

  Despite how high the stakes are, 83% of companies aren’t investing in the technology, people and processes required to properly manage lease-related expenses.

  To stay ahead of costly errors, organizations must prioritize implementing strong controls to safeguard their lease portfolio, which is often their second largest expense just after people-related costs.

  4. Organizations can leverage their leases in their ESG program development and reporting.

  Although 99% of senior real estate executives believe it’s important for their company’s future leases to help reduce its carbon footprint, 95% of companies still don’t have a fully established ESG program in place and 41% report they haven’t begun any ESG initiatives yet.

  But regardless of where organizations stand in their ESG journey, they need to be able to accurately track and record where the bulk of their carbon emissions occur, which is across its lease portfolio. Investing in the right technology that offers carbon measurement and reporting features will give leaders a clear line of sight into their environmental impact, allowing them to meet reporting requirements.

  For more information on how Visual Lease can help your business take control of its leases and take charge of what’s next, schedule time with our team.

   

  The post The Evolution of Leasing: 4 Trends to Expect in 2023 first appeared on Visual Lease.]]> https://visuallease.com/mastering-lease-accounting-internal-controls-part-2-top-7-control-activities-and-how-technology-can-help/ Mon, 24 Apr 2023 12:49:12 +0000 https://visuallease.com/?p=7944 This is part II of our Mastering Lease Accounting Compliance series. If you missed part I, you can read it here. Adopting a lease accounting standard can have a significant...
  The post Mastering Lease Accounting Internal Controls [Part 2]: Top 7 Control Activities and How Technology Can Help first appeared on Visual Lease.]]>

  This is part II of our Mastering Lease Accounting Compliance series. If you missed part I, you can read it here.

  Adopting a lease accounting standard can have a significant impact on your organization’s balance sheet and financial statement footnotes. Moreover, it also expands lease disclosures and comes with the added burden of complying with lease accounting standards. In this post, we’ll share insights on controls and how technology can help organizations meet the challenges of lease accounting compliance.

  What are some of the top lease accounting control activities?

  Today we’re highlighting 7 of the top control activities that can help organizations with lease accounting compliance.

  These activities can be classified into two buckets: control activities and monitoring activities.

  The control activities include standardization of documentation, separation of duties, authorization and approvals, system access controls, and safeguarding of assets. The monitoring activities are audit trail and reconciliation.

  What are the Control Activities?

  • Standardization of Data and Documentation

  Every lease agreement is different, and the concept of standardization helps control both documents as well as the data they contain. Standardization helps control chronology such as original lease, amendments, renewals, etc. Also, completeness of both the document and package as well as any missing data elements and consistency that everything shows up in the same place within the platform. It also provides for ease of auditability through input templates defined, data fields, a contract repository, and the ability to set up fields for clauses, this is truly the concept of a single source of truth.

  • Separation of Duties

  Separation of duties is a critical control activity in lease accounting compliance. Organizations should ensure that folks in accounting should not be allowed to make changes to the system for things that can be operationally critical, such as term dates, and other aspects of the lease that are critical to the operations of that lease. User-defined roles can be set up in a system to ensure that lease admins have a certain level of activity within the system, while lease accountants can perform other activities, but never the two shall meet, so to speak.

  • Authorization and Approvals

  Authorization or approvals is another control activity that intersects with system access controls. Someone who is not in the system daily making changes, updates, etc. should be the one that approves the change log right these changes and reviews the log. They shouldn’t be making it the same way that someone who is inputting data daily is.

  • System Access Controls

  System access controls are vital in ensuring the security and integrity of lease data. Setting up user profiles that grant specific access levels is a good way to restrict access to sensitive data. For example, you can set up different profiles for admins, accountants, supervisors, reviewers, and auditors. Additionally, security features like SSL and two-factor authentication provide extra security not just for internal users but also for external users accessing the system.

  • Safeguarding of Assets

  Lease agreements often involve valuable assets that are critical to a company’s operations. Thus, it’s important to safeguard these assets by ensuring that you have a system in place that alerts you to critical dates and events related to lease agreements. For instance, if a lease agreement is coming to an end, you should be notified in advance, giving you enough time to renew the lease or negotiate favorable rates. Failure to safeguard these assets can result in a loss of critical business locations or unfavorable rates, which could be detrimental to the business.

  What are the Monitoring Activities?

  • Reconciliation

  Reconciliation is a vital process in lease accounting that ensures the accuracy and completeness of lease data. It involves comparing lease data across different periods to identify any discrepancies or errors. However, reconciliation is not 100% satisfied by the system, and compensating user controls are necessary to complete the process properly. Fortunately, lease accounting software provides a variety of role reports that enable the reconciliation of different activities within the lease accounting process.

  • Audit Trail

  Auditing is a critical part of lease accounting that ensures compliance with lease accounting standards and regulations. In addition to compliance, audit trails are also essential in establishing the accuracy and completeness of lease data. In Visual Lease, for example, there’s a quantitative disclosure report that provides a summary of all the information needed to pop into your footnote. The report also allows users to drill down into each of those summary numbers to see how they were built up. This feature provides an audit trail that users can use to establish the detail behind those numbers. Furthermore, the audit trail can be handed off to auditors to test the report and the audit trail that has that drilled-down feature.

  How can I implement better controls?

  Adopting a lease accounting standard can have a significant impact on an organization’s balance sheet and financial statement footnotes. To comply with these standards, organizations need to implement controls around accounting and reporting, which must be audited and continuously monitored. Collaboration between departments is necessary to ensure compliance, and auditors may need to engage with folks outside of accounting to test the controls in place. Fortunately, technology like Visual Lease can help organizations meet the challenges of lease accounting compliance. To learn more about Visual Lease’s Lease Accounting solutions, click here.

   

   

  The post Mastering Lease Accounting Internal Controls [Part 2]: Top 7 Control Activities and How Technology Can Help first appeared on Visual Lease.]]> https://visuallease.com/mastering-lease-accounting-internal-controls-part-1-unveiling-the-key-categories-for-compliance/ Mon, 24 Apr 2023 12:44:59 +0000 https://visuallease.com/?p=7942 This is part I of our Mastering Lease Accounting Compliance series. If you’re looking for part II, you can read it here. Lease accounting standards such as ASC842 and IFRS16...
  The post Mastering Lease Accounting Internal Controls [Part 1]: Unveiling the Key Categories for Compliance first appeared on Visual Lease.]]>

  This is part I of our Mastering Lease Accounting Compliance series. If you’re looking for part II, you can read it here.

  Lease accounting standards such as ASC842 and IFRS16 have significantly changed companies’ financial reporting requirements. These standards require companies to be more diligent in their financial reporting and lease management processes. The implementation of these standards requires a series of controls to ensure accuracy and compliance.

  What are some of the key categories for Lease Accounting Internal Controls?

  Lease accounting internal controls fall into four main categories: Transition-related Controls, Financial Reporting Controls, Activity-related Controls, and IT General Controls.

  1. Transition-related controls are short-term controls that focus on the transition period when implementing the new lease accounting standards. These controls include ensuring accurate lease listings during the transition, appropriate documentation, and other related processes. It is important not to lose track of these controls, as some of them have ongoing relevance even after the transition period. Some of these controls may become relevant again when companies move across the technology maturity spectrum.
  2. Financial Reporting Controls are critical to ensuring that companies comply with the new lease accounting standards. These controls include familiar checklists for disclosure and IFRS16 reporting and existing internal controls for financial reporting. In addition, lease-specific controls such as reconciling lease disclosures with related system reports are essential to ensure accuracy in financial reporting.
  3. Activity-related controls refer to controls around lease management processes such as lease modifications, lease terminations, and lease renewals. These controls include ensuring that there are appropriate approvals in place for these processes and that lease modifications and renewals are reflected accurately in the company’s financial statements. Activity-related controls also include lease classification reviews, which ensure that leases are classified correctly as operating or finance leases. This is important because it affects the way leases are recorded in the company’s financial statements.
  4. IT General Controls are controls that ensure the integrity of the company’s IT systems, data, and processes. These controls include ensuring appropriate access controls, data backups, and data security. IT General Controls are particularly important for lease accounting standards as they involve significant data and calculations.

  To learn more about lease accounting internal controls – including the top seven control activities and how technology can help with lease accounting, check out part II of this blog. If you’re looking for reliable lease controls and audit-ready financial reports, learn more about Visual Lease’s Lease Accounting Solution.

   

   

  The post Mastering Lease Accounting Internal Controls [Part 1]: Unveiling the Key Categories for Compliance first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-announces-strong-results-and-extended-value-in-first-quarter/ Wed, 19 Apr 2023 13:26:37 +0000 https://visuallease.com/?p=7933 Company’s innovative solutions and customer-centric approach drive accelerated growth Woodbridge, NJ – April 19, 2023 — Visual Lease, the #1 lease optimization software provider, today announced its results from Q1...
  The post Visual Lease Announces Strong Results and Extended Value in First Quarter first appeared on Visual Lease.]]>
  Company’s innovative solutions and customer-centric approach drive accelerated growth

  Woodbridge, NJ – April 19, 2023 — Visual Lease, the #1 lease optimization software provider, today announced its results from Q1 2023, reporting double-digit annual recurring revenue and customer percentage growth year-over-year. The company continues to invest in its platform and services to provide extended value to its growing customer base.

  “This quarter, our customers used Visual Lease to demonstrate the strategic value of their leases, resulting in accelerated growth for our organization,” said Robert Michlewicz, CEO of Visual Lease. “Furthermore, we welcomed an impressive class of new customers who are using recent regulatory changes to enhance their business operations while simultaneously maintaining compliance. In March, we launched VL ESG Steward, deepening Visual Lease’s commitment to being a strategic provider positioned to assist companies’ sustainability efforts across their portfolio of leased and owned assets. We are grateful to our loyal customers, industry experts and the hardworking VL team for their valuable contributions to our successful growth and platform expansion.”

  In Q1 2023, Visual Lease:

  • Announced the Launch of VL ESG StewardA carbon accounting and ESG reporting solution designed to track and report on the environmental impact of an organization’s owned and leased asset portfolio, including energy consumption, water, biodiversity and greenhouse gas emissions. VL ESG Steward is the first tool of its kind within the lease management and accounting solution space and will help businesses and governments establish their ESG baseline, manage and report on emissions at an asset level and establish auditable controls to help teams work together, efficiently and reliably.
  • Appointed Amie Durr as VL’s First Chief Product Officer
    With nearly 15 years’ experience in product management, Durr is responsible for overseeing the organization’s product and engineering teams to ensure continued product innovation with even greater speed to market. Durr’s team lead the development of VL ESG Steward.
  • Launched Product Enhancements
    Visual Lease enhanced existing product functionality and provided an updated user interface to its lease accounting system to effectively reduce load times and create efficiencies during a critical time of year for accounting and finance teams.
  • Unveiled a New Report from The VL Data Institute (VLDI)
    The 2023 Commercial Real Estate and Leasing Trend report from The VLDI reveals how businesses are changing and why they enter into new leases in response to the evolving workplace and economy. Highlighted in this recent analysis are lease term priorities, post-pandemic economy lease impact, ESG priorities and more. Findings from the research have been featured in Accounting Today, Yahoo! Finance, Benzinga, Globe St. and more.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease, the #1 lease optimization software provider, empowers organizations to leverage their lease portfolio as a strategic asset. Our platform is uniquely designed to meet the needs of every team that interacts with a company’s lease portfolio to reduce risk, drive confident and sustained lease accounting compliance and provide the visibility required to make agile business decisions. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS and GASB lease accounting standards and implement proper lease controls to improve the financial, legal and operational performance of their leases. Our award-winning software is used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.

  Media Contact

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Visual Lease Announces Strong Results and Extended Value in First Quarter first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-launches-vl-esg-steward/ Wed, 29 Mar 2023 14:00:36 +0000 https://visuallease.com/?p=7867 The first sustainability-focused lease tracking and reporting software designed to help companies meet their environmental policy goals Woodbridge, N.J. – March 29, 2023 — Visual Lease, the #1 lease optimization...
  The post Visual Lease Launches VL ESG Steward™ first appeared on Visual Lease.]]>

  The first sustainability-focused lease tracking and reporting software designed to help companies meet their environmental policy goals

  Woodbridge, N.J. – March 29, 2023 — Visual Lease, the #1 lease optimization software provider, today launched VL ESG Steward, a solution designed to track and report on the environmental impact of an organization’s owned and leased asset portfolio. This is the first tool of its kind within the lease management and accounting solution space. The solution will enable businesses around the globe to consolidate the data needed to track their carbon footprints across assets like commercial real estate, fleet, equipment and more, and make the necessary changes to address their environmental, social and governance (ESG) goals.

  As companies move forward with internal ESG initiatives and keep an eye on the future where there may be set policies and standards in place that require compliance, clearly tracked and detailed energy consumption insights across leased and owned assets will be critical. However, the process of collecting and organizing this data is anything but straightforward. Much like the lease accounting process, the datapoints required to track environmental impact are dynamic and complex. To streamline the process, VL ESG Steward converts consumption data of greenhouse gas emissions (CO2, PFCs, CH4, SF6, N2O, HFCs) using calculations based on the Greenhouse Gas Emissions Protocol and EPA Energy grid emissions factors. The result is an up-to-date and ongoing greenhouse gas inventory as it relates to leased, owned and other intangible assets across an organization’s portfolio.

  “VL ESG Steward is a natural extension of the capabilities we have provided to our customers for more than two decades. As we look ahead, the businesses that have a clear understanding of their greenhouse gas inventory will be in the unique position to easily identify areas where shifts can be made to meet internal and external goals,” said Robert Michlewicz CEO of Visual Lease. “It is a perfect complement to VL’s long standing partnership with our clients as they access dynamic lease data to maintain compliance, ensure accurate accounting practices and leverage their portfolios to their fullest potential.”

  In addition to greenhouse gas emissions, VL ESG Steward tracks a wide variety of environmental factors, including energy consumption, water usage, waste management and more. It collects data from a range of sources and automatically converts it into the standardized measurement of choice.

  Continues Michlewicz, “We’re seeing ESG reporting become an increasingly crucial part of asset management for our clients. In fact, our recent research revealed that 99% of senior real estate executives at companies with more than 1,000 employees believe it is important to reduce the carbon footprint of their future leases. And yet, there hasn’t been a solution to support the accurate tracking and management of this critical data – until now.”

  “As MISTRAS recognizes our responsibility to serve as an agent for positive change and advancement of the company’s ESG initiatives, we’re thrilled to become a pilot customer for VL ESG Steward. We’ve used Visual Lease as our system of record for our portfolio of facility, automobile and equipment leases – and feel that they are well positioned to expand and provide meaningful value into the complex landscape of ESG reporting,” said Thomas Tobolski, Treasurer, MISTRAS Group, Inc.

  VL ESG Steward will provide leaders at both new and existing customers with the clarity needed to further leverage their lease portfolio as a strategic business asset. The launch of VL ESG Steward sets a new precedent in the lease management and accounting space, offering a long-term solution for tracking and reporting ESG commitments that are complex and constantly evolving.

  To learn more about VL ESG Steward and see it in action, visit the Visual Lease website and register for the solution overview webinar on Wednesday, April 19th at 1:00 PM ET.

  About Visual Lease
  Visual Lease, the #1 lease optimization software provider, empowers organizations to leverage their lease portfolio as a strategic asset. Our platform is uniquely designed to meet the needs of every team that interacts with a company’s lease portfolio to reduce risk, drive confident and sustained lease accounting compliance and provide the visibility required to make agile business decisions. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS and GASB lease accounting standards and implement proper lease controls to improve the financial, legal and operational performance of their leases. Our award-winning software is used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.

   

  Media Contact:

  Holland Eichorn
  Visual Lease
  T+1 301 873 9653
  visuallease@calibercorporate.com

  The post Visual Lease Launches VL ESG Steward™ first appeared on Visual Lease.]]> https://visuallease.com/the-visual-lease-data-institute-finds-companies-are-prioritizing-agility-and-risk-reduction-in-2023-real-estate-portfolios/ Wed, 22 Feb 2023 13:05:33 +0000 https://visuallease.com/?p=7815 88% of businesses are planning for physical space needs just one year or less in advance Woodbridge, N.J. – February 22,2023 — Visual Lease, the #1 lease optimization software provider,...
  The post The Visual Lease Data Institute Finds Companies are Prioritizing Agility and Risk Reduction in 2023 Real Estate Portfolios first appeared on Visual Lease.]]>

  88% of businesses are planning for physical space needs just one year or less in advance

  Woodbridge, N.J. – February 22,2023 — Visual Lease, the #1 lease optimization software provider, today unveiled its 2023 Commercial Real Estate & Leasing Trend Report, which reveals that businesses are changing how and why they enter into new leases in response to the evolving workplace and economy.

  Visual Lease found that while 70% of senior real estate executives reported that their businesses are looking to add space as a part of their 2023 real estate strategy, 88% are planning for physical space needs just one year or less in advance – a significant increase from 2022, when only 35% of companies reported planning physical space needs with the same timeline in mind. This change illustrates organizations’ desire to protect their ability to pivot should any unforeseen circumstances arise – a lesson learned from the COVID-19 pandemic. In fact, senior real estate executives identified the ability to sublease and flexible lease termination as top factors to negotiate into future leases.

  This study also found more than half (52%) of senior real estate executives report that their companies are planning to add new satellite locations and 28% are looking to downsize existing spaces. The growing interest in satellite locations and alternate spaces is indicative of how businesses are working to meet the needs of a reimagined workplace – one with flexibility as a core component, embracing hybrid work arrangements, fully remote hires and shared workspaces. In fact, this year 46% of senior real estate executives report that shared desks or offices (booked as needed by workers) provide the best office working environment for their companies.

  “In today’s macro-economic environment, business leaders have to be even more strategic with resource allocation,” said Robert Michlewicz, Visual Lease’s CEO. “As a result, companies are changing how they view their real estate and equipment leases. Once a widely overlooked area of the business, lease portfolios are now helping companies remain agile by providing opportunities for significant hard- and soft-dollar savings. The key, however, to accessing these many benefits is first implementing a strong lease controls framework.”

  Further highlighting the power of proper lease management, 45% of surveyed senior real estate executives report their companies have overpaid rent or expenses due to inadequate lease controls. These costly errors can be attributed to the fact that 83% of real estate executives also share that their companies are not prioritizing an investment in the dedicated technology, people and processes required to successfully manage their lease-related expenses, which is typically the second largest line item for businesses.

  “Without the right technology and processes in place, leases can very quickly turn into substantial liabilities, exposing businesses to compliance risks, failed audits, fees, damaged credibility and wasted resources,” continues Mr. Michlewicz. “There is a major opportunity available to companies across all industries to safeguard themselves against these risks, and also, use their lease data to make better-informed decisions and successfully anticipate future needs.”

  The report also revealed a clear correlation between leases and Environmental, Social, and Governance (ESG) programs and reporting:

  • There is a lot of progress to be made in developing ESG initiatives – 95% of companies do not have a fully established ESG program with 41% reporting they have not begun any ESG initiatives yet.
  • Leasing decisions can support – or undermine – an organization’s environmental sustainability efforts – 99% of those surveyed believe it is important for their company’s future leases to reduce its carbon footprint.
  • Real estate teams need a seat at the table – Despite having access to all the details within a company’s lease portfolio, 55% of senior real estate executives have little to no involvement currently in ESG reporting at their organization.

  Visual Lease surveyed 200 U.S. senior real estate executives at companies with more than 1,000 employees. For full study results, download here.

  About the Visual Lease Data Institute
  

  The Visual Lease Data Institute is a collection of market-leading data, trends and insights on lease accounting, management and optimization created and curated by Visual Lease, provider of the #1 lease optimization software. The Institute was founded on 35 years’ experience managing lease data and financials and was created to arm organizations with the knowledge required to achieve and maintain lease accounting compliance and leverage their leases as strategic business assets.

  About Visual Lease
  

  Visual Lease, the #1 lease optimization software provider, empowers organizations to leverage their lease portfolio as a strategic asset. Our platform is uniquely designed to meet the needs of every team that interacts with a company’s lease portfolio to reduce risk, drive confident and sustained lease accounting compliance and provide the visibility required to make agile business decisions. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS and GASB lease accounting standards and implement proper lease controls to improve the financial, legal and operational performance of their leases. Our award-winning software is used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.

   

  Media Contact:

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post The Visual Lease Data Institute Finds Companies are Prioritizing Agility and Risk Reduction in 2023 Real Estate Portfolios first appeared on Visual Lease.]]> https://visuallease.com/what-lease-accounting-compliance-can-do-for-your-business-next/ Wed, 08 Feb 2023 13:49:46 +0000 https://visuallease.com/?p=7824 In response to lease accounting standards, your business may have already set in place certain lease accounting systems and technology to achieve compliance. But did you know these solutions can...
  The post What Lease Accounting Compliance Can Do for Your Business Next first appeared on Visual Lease.]]>

  In response to lease accounting standards, your business may have already set in place certain lease accounting systems and technology to achieve compliance. But did you know these solutions can do more than help your company stay audit-ready?

  With today’s shortage of finance workers, higher workloads and increasing compliance regulations, companies need to find more efficient ways to manage their lease portfolios. By implementing the right technology, people and systems, your business can leverage its expensive lease portfolio as a more strategic asset. Here’s a closer look at how lease accounting compliance can help your business improve the financial, legal and operational performance of its leases.

  1. Identify cost-saving opportunities

  Financial leaders can use their technology to implement controls that help identify areas where they can reduce costs. This can be done through visibility into options and exercise windows, using insights into actual costs to guard against inflation and securing earned incentives by tracking requirements and timing.

  2. Reduce legal risk

  Lease mismanagement exposes businesses to serious risks, including legal action and, as a result, damaged credibility. However, business leaders can reduce these risks by firmly establishing control of lease terms. As a result, they can rest easier knowing that:

  • They now have visibility into rights and obligations.
  • They’ve limited their exposure to indemnification and other serious obligations.
  • The business is less likely to default by failing to comply with lease terms.
  • They’ve eliminated confusion and wasted time over repair and maintenance responsibility.

  3. Save employee time

  In the current economic conditions, it’s pertinent that businesses save time wherever they can. A Visual Lease report showed that private companies were able to save an average of 600 hours with lease accounting software.

  With the right technology solution, your business can easily integrate, manage and automate lease data between systems to generate detailed disclosure reports, compliance checks, automatic remeasurements and customized data options.

  This means your employees can focus on tasks that drive your business forward instead of rigorous, time-consuming reporting. Reliable, complete data—along with better cross-departmental collaboration—eliminates time spent on redoing accounting work or lengthy audits, and even increases confidence in year-end reporting.

  4. Support agile business decisions

  Businesses with the systems and technology in place for lease accounting compliance are also now equipped with greater visibility into their leases, which leads to making more informed business decisions.

  This is necessary as many organizations are currently spending less time to make plans for their space needs. According to a , 88% of senior real estate executives say their companies are planning for their physical space needs just one year or less in advance.

  Having the right technology and systems already in place also protects your business’ ability to pivot should any unforeseen circumstances arise. And as we learned from the COVID-19 pandemic, these types of predicaments can happen at any time. Yet your organization can quickly react to changing circumstances by reducing footprints, subleasing where needed or opting for shared workspaces.

  With the right lease controls and management solutions established, your business can move past lease accounting compliance and look forward as you leverage this technology to create even greater financial, legal and operational outcomes for your business.

   

   

  The post What Lease Accounting Compliance Can Do for Your Business Next first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-announces-a-record-breaking-2022/ Thu, 19 Jan 2023 21:15:58 +0000 https://visuallease.com/?p=7788      Company achieves its fifth consecutive year of double-digit annual recurring revenue and customer growth Woodbridge, NJ – January 19, 2023 — Visual Lease, the #1 lease optimization software provider,...
  The post Visual Lease Announces a Record-Breaking 2022 first appeared on Visual Lease.]]>

       Company achieves its fifth consecutive year of double-digit annual recurring revenue and customer growth

  Woodbridge, NJ – January 19, 2023 — Visual Lease, the #1 lease optimization software provider, today announced its results from 2022, reporting double-digit annual recurring revenue and customer percentage growth for five consecutive years. The organization now empowers more than 1,000 companies worldwide to sustain compliance with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial and operational performance of their leases.

  “In 2022, we expanded our mission to help businesses leverage their lease portfolios as strategic assets,” said Visual Lease’s CEO, Robert Michlewicz. “By investing in key areas of our product and team, we further enhanced our solutions and services to best support companies during the next leg of their leasing journey. In partnering with Visual Lease, companies across all industries have the ability to easily sustain lease accounting compliance while establishing key controls to leverage their lease data in making strategic business decisions.”

  “In today’s economic environment, it is critical companies tap into the power of strong lease management and accounting solutions to remain agile,” said Visual Lease’s CPO, Amie Durr. “This can only be achieved when they partner with a solution provider that truly understands the different needs of all the teams that interact with lease data – Real Estate, Finance, Accounts Payable, Legal, Procurement, etc. – something that only Visual Lease is built to facilitate.”

  Visual Lease’s key accomplishments from 2022 include:

  Software & Service:

  • Introduced variable period calendars, including 4-4-5, 4-5-4, 5-4-4, 13-period and daily period calculations to better support organizations in retail and other sectors with lease accounting, controls and reporting under ASC 842 and IFRS 16.
  • Released enhanced Fund Accounting functionality, providing Visual Lease users in the government sector with the ability to easily track and record lease transactions on a modified accrual basis for fund accounting and a full accrual basis for government-wide reporting.
  • Provided an updated user interface to its robust yet intuitive platform.
  • Named a winner of a Bronze Stevie® Award in the Customer Service Department of the Year category in The 20th Annual American Business Awards.
  • Earned industry recognition as the leading provider of lease administration and lease accounting software:
    • Received a 2022 PropTech Breakthrough Award for Overall Lease Management Company of the Year.
    • Named a finalist of The 2022 SaaS Awards for the Best SaaS Product for Business Accounting or Finance.
    • Maintained its position as a Leader in both the Lease Administration and Lease Accounting categories on G2 throughout 2022.

  Growth:

  • Hosted its first in-person Customer Advisory Board Summit, a two-day event, where customers gathered to discuss the future of lease accounting, administration and optimization and how Visual Lease is uniquely supporting this evolution. During the event, the company announced the winners of its annual Visual Lease Customer Excellence Awards: American Axle & Manufacturing, CURO Financial, Hearst Communications, Huntington National Bank, Indeed, MDU Construction and Penn State Health.
  • Included in the 5000 list of fastest-growing private companies in America for the third consecutive year, named among the top 100 fastest-growing private companies in New Jersey and the 259th fastest-growing private company in the New York City area.
  • Established an AWS data center in Frankfurt, Germany, enabling EU-based clients to benefit from stronger performance, newer services and features, as well as automatic compliance with residency and regulatory laws regarding their data.

  Strategic Hires:

  • Announced Fin-Tech leadership veteran Robert Michlewicz as CEO, and Marc Betesh, the founder and former CEO, as Executive Chairman – a transition in management structure that has further accelerated the organization’s growth.
  • Announced Alex Betesh as its first Chief Customer Officer, focused on accelerating and deepening Visual Lease’s ability to translate customer feedback into meaningful enhancements to its products, services and strategic alliances.
  • Promoted Amie Durr to the company’s first Chief Product Officer position, responsible for overseeing the organization’s Product and Engineering teams to ensure continued product innovation with even greater speed to market.
  • Welcomed Dan VanVeelen as its Chief Revenue Officer, responsible for executing corporate strategic plans that drive continued, accelerated growth and market-leading client satisfaction.
  • Expanded its Sales, Customer Services, Product and Engineering teams in kind with its growing base of customers to ensure that the company continues to drive innovation and provide a customer experience second to none in the category.

  Brand Recognition:

  • Named a Best Place to Work in New Jersey by NJBIZ for the third consecutive year and ranked among the top third of medium-sized companies (50 – 249 employees), moving up 15 positions in its ranking on the list, year-over-year.
  • Received a Silver Stevie Award for Great Employers in the Employer of the Year in the Computer Software category.
  • Unveiled a new report from The Visual Lease Data Institute, The 2022 Lease Market Analysis: Lease Accounting Readiness, which explores common lease accounting challenges and roadblocks experienced by private companies and government entities. Findings from the research have been featured in Wall Street Journal’s CFO Journal newsletter, CPA Practice Advisor, Globe St., Accounting Today and more.

  Alliance Partners:

  • Launched the Visual Lease Partner Marketplace, a section of its corporate website dedicated to connecting current and potential customers with its trusted network of Alliance Partners for access to top-tier support, including assistance with lease abstraction, consulting, data management, lease audit prep, portfolio reporting and analytics and more.
  • Announced its Premium Implementation Partner program to help companies master their lease administration and accounting software implementation by providing access to leading accounting and advisory firms when implementing Visual Lease’s solutions.
  • Further expanded its Alliance Partner program with premium accounting firms and services companies including Barre & Company LLC, Blue Sky Capital Strategies, LLC, Brady Ware & Company, Embark With Us, ERE, F.H. Black & Company, Vaco and Withum.
  • Co-presented ASC 842 educational webinar sessions with Grant Thornton: ASC 842 Adoption: Avoiding the Pitfalls and How to Prepare for ASC 842 Adoption.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom

  About Visual Lease

  Visual Lease, the #1 lease optimization software provider, empowers organizations to leverage their lease portfolio as a strategic asset. Our platform is uniquely designed to meet the needs of every team that interacts with a company’s lease portfolio to reduce risk, drive confident and sustained lease accounting compliance and provide the visibility required to make agile business decisions. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS and GASB lease accounting standards and implement proper lease controls to improve the financial, legal and operational performance of their leases. Our award-winning software is used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.

   

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 770 2270
  ebonavitacola@visuallease.com

  The post Visual Lease Announces a Record-Breaking 2022 first appeared on Visual Lease.]]> https://visuallease.com/4-common-risk-areas-found-in-a-lease-portfolio-what-to-know-and-how-to-avoid-them/ Tue, 10 Jan 2023 21:25:45 +0000 https://visuallease.com/?p=7801 Today, many organizations lack control over their leases, which increases the risk of making costly errors, such as overpaying or missing a date for termination or renewal. (90% of senior...
  The post 4 Common Risk Areas Found in a Lease Portfolio: What to Know and How to Avoid Them first appeared on Visual Lease.]]>

  Today, many organizations lack control over their leases, which increases the risk of making costly errors, such as overpaying or missing a date for termination or renewal. (90% of senior Real Estate Executives do not believe they have access to the data they need to make an informed decision about their company’s lease portfolio.)

  With leases usually serving as a business’ second-largest expense, they are far too valuable to overlook and undermanage.

  Here are four common risks areas found in your lease portfolio and how to avoid them.

  1. Inaccurate, unreliable lease data

  Leases contain hundreds of unique terms and options that evolve over time. To remain aware of each liability and option, you’ll need to have visibility into the details within your leases.

  As leases change, it’s important to keep track of every update or modification that has been made to your leases. By doing so, you will ensure that your data – and as a result, your financial reporting – is always accurate.

  To get a firm grasp on your lease data, first identify all lease contracts within your organization and then, centralize your lease data within a reliable lease accounting solution that enables you to view and maintain your leases as they change, and also, know what updates were made and when.

  2. Lease misclassification

  To comply with the lease accounting standards, companies are required to classify leases as operating or finance leases at their inception. The distinction is important since misclassification can impact:

  • The balance sheet
  • Expenses related to operating and finance leases
  • Understanding of credit agreements and covenants that may limit the number of finance leases
  • Company metrics, bonuses or incentive plans due to misclassified “geography” of the respective accounts in the balance sheet

  To ensure accurate classification of leases, it’s important to implement processes that support the criteria for reporting on operating and finance leases. Utilize your lease accounting solution to help your team properly classify leases and record them on the balance sheet.

  3. A lengthy, expensive audit process

  Your audit will likely take more time without a view into the lease accounting calculations and adjustments made to your lease data. To reduce time (and money), provide auditors with a complete view into your lease data, along with a full audit trail of every change – both of which can be accomplished by utilizing a strong lease accounting and administration platform.

  Further, automated calculations backed by a SOC 1 Type 2 certification ensure everything is by the book for a seamless audit process. This added layer of necessary verification ultimately reduces the time auditors spend verifying accuracy and decreases the risk of any miscalculations.

  4. Lease overpayments

  Leases are complex, expensive contracts with many different terms, options and important dates. However, nearly three-quarters (71%) of private companies say they are not confident about the complete cost of their leases.

  This lack of visibility into your leases can put you at risk of making significant overpayments and costly mistakes. Luckily, this can be addressed by implementing technology and processes that make it easy to keep track of your lease terms.

  By keeping close tabs on your leases through technology, you can identify opportunities to save money within your lease portfolio, be aware of options and exercise windows and avoid confusion regarding repair and maintenance costs.

  Protect your business from risks with end-to-end lease administration and lease accounting.

  To avoid the risks associated with not having complete visibility into your lease portfolio, it’s important to maintain automation, lease controls and strong collaboration across all departments that touch the leasing process.

  Choosing software like Visual Lease can help you reduce risk, drive confident and sustained lease accounting compliance and provide the visibility required to make agile business decisions. We can help you implement robust lease controls that support continued compliance with FASB, IFRS and GASB lease accounting standards, while empowering you to maximize the financial and operational performance of your leases.

  The post 4 Common Risk Areas Found in a Lease Portfolio: What to Know and How to Avoid Them first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-appoints-amie-durr-as-first-chief-product-officer/ Mon, 09 Jan 2023 14:00:44 +0000 https://visuallease.com/?p=7761 Company continues to strengthen senior leadership team and invest in product innovation Woodbridge, NJ – January 9, 2023 — Visual Lease, the #1 lease optimization software provider, today announced its...
  The post Visual Lease Appoints Amie Durr as First Chief Product Officer first appeared on Visual Lease.]]>

  Company continues to strengthen senior leadership team and invest in product innovation
  

  Woodbridge, NJ – January 9, 2023 — Visual Lease, the #1 lease optimization software provider, today announced its first Chief Product Officer, Amie Durr. Having most recently served as the company’s SVP of Product, Durr brings nearly 15 years of product management experience to Visual Lease. With the introduction of this C-level office, Durr will oversee the organization’s Product and Engineering teams to ensure continued product innovation with even greater speed to market.

  “For more than 26 years, Visual Lease has helped companies maximize the value of their leases,” said Visual Lease CEO, Robert Michlewicz. “We remain committed to delivering a platform that empowers organizations to leverage their lease portfolios as strategic assets. With Amie’s expert guidance and direction, our Product and Engineering teams will work seamlessly together while introducing new platform features and functionality that enable our customers to fully control and leverage their portfolios to make stronger business decisions.”

  Durr joined Visual Lease in August 2022 as SVP of Product. Prior to joining the company, Durr was the Vice President of Product Management at SparkPost, where she was responsible for products delivering nearly 40% of all commercial emails. Amie’s contributions were a driving force behind MessageBird’s acquisition of SparkPost for $600M in 2021.

  “Our most recent survey under The Visual Lease Data Institute found that 83% of companies are not prioritizing dedicated technology, people and processes to successfully manage their lease-related expenses,” said Durr. “In my new role, I am excited to champion continued product innovation to help these organizations use Visual Lease to not only sustain lease accounting compliance, but also, optimize their leases for a range of tangible business benefits.”

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease, the #1 lease optimization software provider, empowers organizations to leverage their lease portfolio as a strategic asset. Our platform is uniquely designed to meet the needs of every team that interacts with a company’s lease portfolio to reduce risk, drive confident and sustained lease accounting compliance and provide the visibility required to make agile business decisions. Informed by nearly three decades of experience, our solutions help companies easily sustain compliance with FASB, IFRS and GASB lease accounting standards and implement proper lease controls to improve the financial, legal and operational performance of their leases. Our award-winning software is used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets globally. For more information, visit visuallease.com.

   

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

   

  The post Visual Lease Appoints Amie Durr as First Chief Product Officer first appeared on Visual Lease.]]> https://visuallease.com/how-to-prepare-for-the-perfect-year-end-close/ Wed, 28 Dec 2022 13:59:43 +0000 https://visuallease.com/?p=7750 Accounting teams are often left scrambling to find lease information needed to wrap up the year and prepare for their audit. As businesses approach year-end, how can they ensure an...
  The post How to Prepare for the Perfect Year-End Close first appeared on Visual Lease.]]>

  Accounting teams are often left scrambling to find lease information needed to wrap up the year and prepare for their audit.

  As businesses approach year-end, how can they ensure an easier closing of the books? It starts by having visibility and control of lease information, maintaining strong lease accounting procedures and open communication between accounting and real estate teams throughout the year. Let’s take a closer look at these strategies.

  The role lease accounting plays in a year-end close

  Closing the books for the year is an annual process that most companies have to perform. Although this process can be tedious and time consuming, it’s vital to make sure all financial information about your business is accurate.

  To be as efficient as possible, companies should work throughout the year to ensure processes are in place each month for a straightforward monthly close. A regular, clean month-end close sets businesses up to successfully and seamlessly execute a final closing of the books at the end of the year.

  No year-end close checklist is complete without making sure all leases and related financial documents are up to date and correct. After all, for most businesses, the cost and value of their leases are second only to the cost of their people. As a result, if a company’s lease accounting information isn’t complete and accurate, it can lead to expensive errors (such as findings, like a material weakness, significant deficiency or control weakness) and waste time during the year-end closing process.

  Monthly procedures to maintain accurate lease accounting

  Without accurate lease accounting, businesses risk making costly mistakes. According to the Visual Lease 2021 Lease Accounting Readiness report, 99% of senior finance and accounting professionals surveyed at private companies expressed concern regarding several pitfalls of misreporting company lease information, including:

  • Increased audit fees and fines (51%)
  • Risk of legal action (48%)

  To avoid these expensive risks and stay on top of monthly lease accounting, accounting teams should implement the following procedures.

  1. Centralize financial information for leases: A lease accounting software like Visual Lease can help keep track of this critical information for the company.
  2. Set a clear timeline: Ensure teams are on the same page and are on track to deliver all necessary information.
  3. Standardize all processes: Having a system for your lease accounting procedures allows your accounting teams to easily repeat them each month.
  4. Communicate regularly with the real estate team: Make sure your business’ real estate team knows what information they must relay to the accounting team and by when. It’s important to work with lease accounting software that can create a system audit trail and show what changes are made to which leases, who made the changes, and when.

  If your accounting teams use the right lease accounting software, maintain clear expectations and processes, and collaborate with the real estate team, your business will have an easier and more accurate closing of the books each year. These steps also set up your company for financial success for years to come.

   

  The post How to Prepare for the Perfect Year-End Close first appeared on Visual Lease.]]> https://visuallease.com/how-to-use-the-4-methods-of-calculating-depreciation-under-us-gaap/ Thu, 22 Dec 2022 20:20:03 +0000 https://visuallease.com/?p=7736 What is depreciation in accounting? The 4 depreciation methods in accounting Can you change depreciation methods from year to year? Straight line method Declining balance method Units of production depreciation...
  The post How to Use the 4 Methods of Calculating Depreciation Under US GAAP first appeared on Visual Lease.]]>
  • What is depreciation in accounting?
  • The 4 depreciation methods in accounting
  • Can you change depreciation methods from year to year?
  1. Straight line method
  2. Declining balance method
  3. Units of production depreciation method
  4. Sum-of-the-years’ digits method
  • Interested in lease accounting?

  To maintain accurate accounting, many companies must follow generally accepted accounting principles (GAAP or US GAAP), which work on the assumption that almost every type of business asset loses value over time.

  What is depreciation in accounting?

  Depreciation allows organizations to account for this lost value and allocate the cost of a tangible asset over its useful life – the estimated lifespan of a depreciable fixed asset, during which it can be expected to contribute to company operations. In accounting, useful life is an important concept since a fixed asset is depreciated over this period of time.

  GAAP introduced a set of accounting procedures for asset depreciation to ensure consistency and accuracy among organizations.

  The 4 depreciation methods in accounting

  To properly depreciate an asset under GAAP, accounting professionals must calculate the total cost of the asset, how long the asset will last before it must be replaced and how much an asset can sell for at the end of its useful life.

  There are four methods for calculating depreciation:

  • Straight line method
  • Declining balance method
  • Units of production method
  • Sum-of-the-years’ digits method

  Can you change depreciation methods from year to year?

  The depreciation method can change from year to year, however it’s best to remain consistent to ensure compliance with the US GAAP standards. Proper documentation to demonstrate the change and justification must be provided.

  Accountants are responsible for figuring out the correct GAAP depreciation method to use based on which method will achieve the most satisfactory allocation of cost. Let’s look more closely at these methods and how businesses can apply them.

  Accountants are responsible for figuring out the correct GAAP depreciation method to use based on which method will achieve the most satisfactory allocation of cost. Let’s look more closely at these methods and how businesses can apply them.

  1. Straight line method

  The simplest and most popular method of depreciation is the straight line method. This involves deducting the salvage value from the cost of the asset and dividing the resulting number by the asset’s useful life.

  To illustrate this formula, let’s say a company buys a $15,000 machine with a salvage value of $4,000 and a useful life of 10 years. If the company in this example used the straight line method of depreciation, the annual depreciation cost would be $1,100. 

  2. Declining balance method

  The declining balance method — a form of accelerated depreciation — allows an organization to depreciate an asset more heavily during its earlier years using a fixed percentage rate. The double declining method is a subset of the declining balance method, but as the name implies, it doubles the rate of depreciation.

  These methods are most useful for assets that lose value quickly, such as vehicles, computers, cellphones or other technology.

  

  3. Units of production depreciation method

  The formula for the units of production method is similar to that of the straight line method. But instead of using time to define the useful life of an asset, this method uses the number of units produced or hours of operation.

  The units of production method allows organizations to deduct higher depreciation costs during years when an asset is used more or produces more units. For example, this may be utilized by a manufacturing company that used a specific piece of machinery to produce X units in 2022 but that will be phased out in 2023 so they will have a lower rate of depreciation next year.

  

  4. Sum-of-the-years’ digits method

  The most complex method is the sum of the years’ digits, which is another form of accelerated depreciation. This method provides a better indication of value for fast-depreciating assets. Because the depreciation formula for the sum of the years’ digits is difficult to calculate, it can present a cumbersome challenge for asset-heavy businesses.

  

  Knowing when and how to apply these various depreciation methods in compliance with GAAP can be complicated. Leveraging an innovative software solution such as Visual Lease can help your organization streamline the process, eliminate risk exposure and save more on taxes.

  Interested in lease accounting?

  Take the next step and schedule a demo with Visual Lease to ease your lease accounting needs today!

  The post How to Use the 4 Methods of Calculating Depreciation Under US GAAP first appeared on Visual Lease.]]> https://visuallease.com/why-sustained-lease-accounting-compliance-depends-on-automation/ Tue, 20 Dec 2022 19:19:12 +0000 https://visuallease.com/?p=7732

  

  On-demand webinar summary

  How do you maintain confident, ongoing lease accounting compliance as your leases evolve?

  In our recent webinar, Why Sustained Lease Accounting Compliance Depends on Automation, lease accounting experts from Visual Lease shared:

  • The post-adoption lease accounting landscape
  • The difficulties and risks of using spreadsheets
  • Why auditors prefer software for reliability

   

   

  

  Joe Fitzgerald

  SVP of Lease Market Strategy
  Visual Lease

  

  Jason Lucas

  Manager, Sales Engineering Visual Lease

  Track changing lease terms

  As leases change, it’s virtually impossible to track them manually or using a spreadsheet. This is often because businesses typically have a large volume of leases – and each one contains its own unique, complex lease terms that must be interpreted.

  Lease accounting technology is the only way to update lease clauses and options without having to manually sift through contracts. This saves a lot of time – and headache – when maintaining compliance.

  Further, having easily-accessible lease data also enables you to leverage your lease data beyond compliance and make smarter business decisions, such as identifying gaps and savings opportunities.

   

  Provide historical lease data for audits

  Without technology that offers a complete audit trail of every update made to your leases, you, internal stakeholders and your auditors will be left wondering if your lease data is fully reliable or up-to-date.

  Unlike spreadsheets, lease accounting technology also ensures you can track who, what, where and when updates were made, so you can be fully confident in the accuracy of the data at the time of an audit.

   

  Accurate calculations and reports

  Just one error within your lease accounting calculation can lead to a failed audit.

  Technology, like Visual Lease, ensures precise calculations and reports – and reduces time and resources needed to do so. Additionally, if you use a spreadsheet, you are also going to be limited to the number of transactions that can be tracked and reported. This will create issues that can be avoided from using automated technology that offers calculations that are explained in every screen and backed by SOC I Type II audits that ensure consistency.

   

  Want to see more? View the on-demand webinar for a closer look at how Visual Lease supports Day 2 lease accounting compliance: Why Sustained Lease Accounting Compliance Depends on Automation.

   

  The post Why Sustained Lease Accounting Compliance Depends on Automation first appeared on Visual Lease.]]> https://visuallease.com/5-questions-that-should-be-on-every-financial-leaders-mind/ Mon, 19 Dec 2022 15:27:38 +0000 https://visuallease.com/?p=7792 When considering the financial impact of your lease portfolio, there are five questions to keep in mind. Detailed below, answering these questions can help you better understand: Your readiness for...
  The post 5 Questions That Should Be on Every Financial Leader’s Mind first appeared on Visual Lease.]]>

  When considering the financial impact of your lease portfolio, there are five questions to keep in mind.

  Detailed below, answering these questions can help you better understand:

  • Your readiness for sustained lease accounting compliance
  • How to reduce risks within your leases
  • Your preparedness for the next compliance task
  • Whether your organization has enough resources
  • How to ensure efficiency and accuracy

  Here’s how each of these critical points can affect your business’ success in 2023.

   

  1. Is your business set up to sustain lease accounting compliance?

  After initial adoption of the lease accounting standards, you will have to stay on top of evolving lease data to stay compliant. Every change made to your leases (such as terminations, expirations, etc.) will need to be tracked.

  Without the right tools, this is a complicated process due to the intricacies of the lease terms and the high volume of leases an organization holds. Your business can’t sustain confident, ongoing compliance without proper lease controls.

  Software solutions that provide lease administration and lease controls help organizations maintain accurate, up-to-date lease data and confident lease accounting. But not all lease accounting lease accounting technology supports ongoing lease administration required for ongoing lease accounting compliance. Unlike many other software solutions, Visual Lease has built-in lease administration capabilities required to keep businesses compliant.

  2. How can your company reduce risk within its leases?

  Leases are costly, complex contracts. Having the right controls in place ensures that businesses are equipped with full visibility into these dynamic documents which allows financial leaders to avoid costly risks associated with their lease portfolios.

  Without the right lease controls in place, businesses run the risk of making overpayments and missing lease options – both which cost the company and hurt the bottom line. In addition, lacking full visibility into your business’s lease portfolio could result in inaccurate financial reporting which then brings the risk of falling into non-compliance along with being subject to costly audits and fines.

  3. Is your company prepared for the next compliance task (ESG)?

  As ESG (environmental, social and governance) garners increasing attention and ESG reporting regulations continue to evolve, financial leaders must evaluate their preparedness. In fact, according to a 2021 survey from PwC, 79% of investors identified ESG risk as an important factor in investment decisions.

  When it comes to corporate leases, accurate and efficient portfolio management — along with lease optimization — can help companies comply with ESG priorities. For example, businesses can evaluate leases and lessors to show they are good ESG partners with greener building or equipment initiatives in place.

  Setting up the right data-gathering methods and technology also allows companies to constantly evaluate their leased asset portfolio for areas that can be consolidated and reduced, creating a more sustainable portfolio.

  4. Do you have enough resources to support lease accounting compliance and optimization?

  With the current shortage of finance workers (exacerbated by the Great Resignation), increasing compliance regulations and higher workloads, your business must prepare to enable teams for lease accounting and management success. Now more than ever, it’s important to invest in streamlined communication processes among departments as well as the right technology.

  5. How can your organization increase efficiency and ensure accuracy?

  Automation can help save businesses both time and money. Lease accounting involves complicated calculations that, if handled incorrectly, can lead to expensive mistakes. Automation serves to reduce the risk of costly human errors, avoid additional audit fees and streamline operations. In this way, integrations with the right lease accounting and management partners, such as Visual Lease, can help set up your company for lease portfolio success in 2023.

  Whether your lease accounting goals for 2023 involve saving money on audits or increasing efficiency while maintaining compliance, it’s important to have a plan regarding how you will attain them. And at the end of the day, it’s the right combination of people and technology that will best help you achieve your lease accounting and optimization goals.

   

  The post 5 Questions That Should Be on Every Financial Leader’s Mind first appeared on Visual Lease.]]> https://visuallease.com/how-to-prepare-for-day-2-lease-accounting/ Thu, 15 Dec 2022 21:25:00 +0000 https://visuallease.com/?p=7743

  

  On-demand webinar summary

  Your lease portfolio requires consistent upkeep to remain compliant with ASC 842. As your leases change, how will you stay audit-ready?

  In our recent webinar, How to Prepare for Day 2 Lease Accounting, experts from Visual Lease and BDO shared insight into:

  • What’s required to remain compliant throughout Day 2
  • When to reassess and remeasure
  • Processes to implement now for success later

  

  Joe Fitzgerald

  SVP of Lease Market Strategy
  Visual Lease

  

  Matthew Coker

  Managing Director, Accounting & Reporting Advisory Services BDO USA, LLP

  Key Elements to Sustain Lease Accounting Compliance

  

   

  When identifying a process to ensure ongoing lease accounting compliance, ask yourself:

  1. Have leases been added, terminated, shortened, extended or impaired?​
  2. Have there been changes to service agreements (embedded leases)?​
  3. Have assumptions changed related to extensions or purchase options?​
  4. Have leasehold improvements been made?​
  5. Do you have a process in place to maintain completeness and accuracy?

   

  When to Reassess Leases

  As leases evolve, you will need to continuously review them. In particular, it’s important to be aware of the following:

  • A significant event or change within the lessee’s control directly affects whether the lessee is reasonably certain to exercise (or not to exercise) an option​
  • An event occurs that contractually obliges the lessee to exercise (or not to exercise) an option to extend or terminate the lease​
  • The lessee elects to exercise an option even though the entity had previously determined that the lessee was not reasonably certain to do so​
  • The lessee elects not to exercise an option even though the entity had previously determined that the lessee was reasonably certain to do so​

   

  When to Remeasure

  There are numerous conditions that impact when to remeasure a lease.

  

  To learn more about what is required to maintain ongoing lease accounting compliance, view the on-demand webinar: How to Prepare for Day 2 Lease Accounting.

   

   

  The post How to Prepare for Day 2 Lease Accounting first appeared on Visual Lease.]]> https://visuallease.com/asc-842-roundtable-discussion-how-to-ensure-compliance-throughout-day-2-2/ Tue, 01 Nov 2022 17:05:56 +0000 https://visuallease.com/?p=7658

  

  On-demand webinar summary

  Without a firm grip on your leases, you will likely have trouble sustaining accurate lease data. This puts your business at risk of misreporting company lease information to comply with ASC 842, which can lead to increased audit fees and fines, legal action and more. 

  In our recent webinar, ASC 842 Roundtable Discussion: How to Ensure Compliance Throughout Day 2, experts from Visual Lease and Embark discussed how to instill confidence in your lease data through: 

  • Data Management: Keeping up with lease modifications and terminations, as well as data abstraction and validation 
  • Change Management: Understanding new requirements and educating staff, as well as maintaining processes, policies and controls 
  • Audit Prep: Ensuring you’re ready for your year-end audit

  

  Joe Fitzgerald

  SVP of Lease Market Strategy
  Visual Lease

  

  Matt Watson

  Director, Implementation Services
  Visual Lease

  

  Matt Fisser, CPA, ABV

  Managing Director, Financial Accounting A
  Embark

  

  Rosemary Courtney, CPA

  Manager, Technical Accounting
  Visual Lease

  To learn more, read the summary below or view the on-demand webinar. 

  The importance of data management

  You can’t manage your leases (stay on top of critical dates and options) without entering your lease data into a digitized solution. Often known as lease abstraction, this process is considerably one of the most time-consuming, risky parts of preparing for lease management and accounting.  

  Entering your leases incorrectly could lead to some big mistakes within your financial reports. In this webinar presentation, Matt Watson, Director of Implementation at Visual Lease, shared how businesses can validate their data right from the start for reliable results. 

  In addition, once your lease data is accurately abstracted within a dependable solution, that is when true data management comes in. Leases are fluid contracts – they are always changing. Whether your organization modifies, terminates or takes on new leases, each of these changes will need to be accounted for.  

  This can be incredibly cumbersome without technology that makes your lease data easily accessible. 

  Understanding new requirements and educating staff 

  To stay audit-ready, your business must plan for how its going to maintain policies and lease controls – and keep staff up-to-date on any changes. This includes changes to the accounting standards and the leases.  

  Because leases reside within different departments (such as supply chain, IT, etc.), you’ll need to make sure there’s a way for the departments to communicate any updates to leases they’re responsible for. This onerous process requires more collaboration than just between finance, accounting and real estate.  

  What to do to be audit-ready 

  Lastly, the presentation shared insights on documentation that businesses should have ready for their auditors. Businesses should provide both a PDF and Excel version of the disclosure report that includes the accounting calculations. This provides auditors with a view into your process, so they can see how your reports were calculated.  

  Besides disclosure reports, you may also want to produce a journal entry summary report, adoption memo, other testing scenarios and SOC reports if you used a software solution to prepare your lease financials. 

  For more details about how to stay audit-ready, view the on-demand webinar: ASC 842 Roundtable Discussion: How to Ensure Compliance Throughout Day 2. 

   

  The post ASC 842 Roundtable Discussion: How to Ensure Compliance Throughout Day 2 first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-appoints-dan-vanveelen-as-chief-revenue-officer/ Tue, 01 Nov 2022 14:00:32 +0000 https://visuallease.com/?p=7655 Organization continues to invest in its leadership team to drive its next stage of growth Woodbridge, N.J. – November 1, 2022 — Visual Lease, the #1 lease optimization software provider,...
  The post Visual Lease Appoints Dan VanVeelen as Chief Revenue Officer first appeared on Visual Lease.]]>

  Organization continues to invest in its leadership team to drive its next stage of growth

  Woodbridge, N.J. – November 1, 2022 — Visual Lease, the #1 lease optimization software provider, today announced the appointment of Dan VanVeelen as the organization’s Chief Revenue Officer. In his role, Dan will lead the organization’s sales, account management and alliance partner teams, and will be responsible for executing corporate strategic plans that drive continued, accelerated growth and market-leading client satisfaction.

  “We recently had a record number of new customers join Visual Lease in a single month,” said Visual Lease’s CEO, Robert Michlewicz. “This milestone is not only a reflection of our unparalleled technology and service, but also, of how we support our customers from their very first interaction with Visual Lease. With Dan’s breadth of experience driving revenue growth at technology companies, he is the perfect addition to our team, and will ensure that we continue to scale at a healthy rate while providing maximum value to our expanding community of customers.”

  Prior to joining Visual Lease, Dan was Senior Vice President of Americas Sales at Precisely, the global leader in integrity data, providing accuracy, consistency, and context in data for 12,000 customers in more than 100 countries, including 99 of the Fortune 100. Under his leadership, Precisely’s Americas Sales team led the company in new business growth and client satisfaction. During Dan’s tenure, Precisely was recognized by Gartner in the Market Share Analysis for Data Management Software as the fifth-highest-ranked vendor by revenue in 2021.

  “VL has the ability to completely transform how businesses view and make more strategic decisions about their lease portfolios,” said Dan. “I am grateful for the opportunity to work with a leadership team that is dedicated to providing the solutions and services organizations need to achieve lease accounting compliance, and also, improve the overall financial controls and benefits they receive from their investments.”

  This addition to Visual Lease’s leadership team comes shortly after Alex Betesh was announced as Visual Lease’s first Chief Customer Officer and Amie Durr was appointed Senior Vice President of Product.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  To learn more about careers at Visual Lease, visit the Visual Lease Career Site.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

   

  The post Visual Lease Appoints Dan VanVeelen as Chief Revenue Officer first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-hosts-customer-advisory-board-summit-announces-vl-customer-excellence-award-winners/ Fri, 28 Oct 2022 13:59:52 +0000 https://visuallease.com/?p=7637 Company welcomes Visual Lease customers and partners to two-day event to network, discuss the future of lease accounting and recognize award-winning accounts Woodbridge, NJ – October 28, 2022 — Visual...
  The post Visual Lease Hosts Customer Advisory Board Summit, Announces VL Customer Excellence Award Winners first appeared on Visual Lease.]]>

  Company welcomes Visual Lease customers and partners to two-day event
  to network, discuss the future of lease accounting and recognize award-winning accounts

  Woodbridge, NJ – October 28, 2022 — Visual Lease, the #1 lease optimization software provider, hosted its Customer Advisory Board Summit, a two-day event (October 19 – October 20^th, 2022) in Nashville, TN, for select customers. Attendees connected with peers to discuss the future of lease accounting, administration and optimization and how Visual Lease is uniquely supporting this evolution for private and public companies, as well as government entities.

  Visual Lease invited senior accounting, finance and real estate executives from leading organizations across all industries, including Huntington National Bank, HomeServices of America Inc., American Axle & Manufacturing Inc., Central National Gottesman, Inc. (Spicer’s Paper), Avis Budget Group, On Q Financial, MDU Construction, Bacardi Limited, Toshiba America Business Solutions + Toshiba Global Commerce, CURO Financial Services, Hearst Communications and Simpson Manufacturing.

  “As we continue to make strategic investments in our technology, services and team, we are committed to keeping an open line of communication with our customers,” said Visual Lease CEO, Robert Michlewicz. “During this event, we were able to hear their perspectives on industry trends that align with our current and future-state platform. We also celebrated several VL customers who have excelled in utilizing our platform to gain stronger internal controls, streamline critical processes and unlock many of the benefits that lease accounting and administration provide when supported by the right technology.”

  The summit’s sessions were hosted by Visual Lease’s leadership team and included a guest speaker from RSM US LLP, a member of VL’s Alliance Partner network. During the event, Visual Lease announced the winners of its annual VL Customer Excellence Awards, recognizing organizations that leveraged VL solutions and services to drive real business results, including:

  • American Axle & Manufacturing 
  • CURO Financial
  • Hearst Communications
  • Huntington National Bank
  • Indeed
  • MDU Construction
  • Penn State Health

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts

  Karen Lee
  Caliber Public Relations
  T+1 929 269 4436
  karen@calibercorporateadvisers

  The post Visual Lease Hosts Customer Advisory Board Summit, Announces VL Customer Excellence Award Winners first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-launches-premium-implementation-partner-program/ Thu, 27 Oct 2022 14:00:19 +0000 https://visuallease.com/?p=7634 Leading technology provider joins forces with top accounting advisors to help companies master their lease administration and accounting software implementation Woodbridge, N.J. – October 27, 2022 — Visual Lease, a...
  The post Visual Lease Launches Premium Implementation Partner Program first appeared on Visual Lease.]]>

  Leading technology provider joins forces with top accounting advisors to
  help companies master their lease administration and accounting software implementation

  Woodbridge, N.J. – October 27, 2022 — Visual Lease, a leading lease optimization software provider, today announced its Premium Implementation Partner program to help companies master their lease administration and accounting software implementation. Through this new program, companies will gain access to leading accounting and advisory firms when implementing Visual Lease’s solutions.  

  “When given the opportunity to harness new technology under the guidance of true industry experts, companies can expect to see an even bigger return on their investment,” said Robert Michlewicz, CEO of Visual Lease. “We’ve aligned with top-tier accounting and advisory firms, such as RSM, Grant Thornton and Baker Tilly to provide organizations with additional support, insights and intel to help them relieve internal resources and simultaneously recognize every benefit associated with choosing Visual Lease. The result? Confident, easy and sustained lease accounting compliance and reduced risk.” 

  Under Visual Lease’s Premium Implementation Partner program, companies will have the opportunity to leverage lease administration, technical accounting and Visual Lease platform expertise to successfully meet adoption requirements and deadlines. 

  “When it comes to transitioning to the new lease accounting standards – ASC 842, GASB 87 and IFRS 16 – there is no time to waste,” added Joseph Fitzgerald, SVP of Lease Market Strategy at Visual Lease. “If companies fail to properly achieve ongoing compliance with the standards, they risk having inaccurate financial statements, increased audit fees and damaged credibility. Under the guidance of seasoned lease administration and lease accounting professionals, organizations will greatly reduce those risks while also streamlining and accelerating their processes for years to come.” 

  By engaging a Premium Implementation Partner’s service, companies can reduce the time and resources needed to gather the necessary lease information required to meet the new lease accounting standards, a process that private companies who are not using third-party software expect to spend an average of nearly 1,600 hours on. Premium Implementation Partners can also assist with other necessary and time-consuming lease accounting tasks, including journal entries and report generation. 

  For more information on the benefits of Visual Lease’s Premium Implementation Partner program, visit RSM, Grant Thornton and Baker Tilly and The VL Partner Marketplace.

  About Visual Lease  

  Visual Lease is a leading lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.   

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com     

  The post Visual Lease Launches Premium Implementation Partner Program first appeared on Visual Lease.]]> https://visuallease.com/lease-audit-procedures-why-do-they-matter/ Thu, 27 Oct 2022 13:58:48 +0000 https://visuallease.com/?p=7666

  

  Lease audit procedures are necessary for an efficient, successful audit. At their core, lease audit procedures ensure your organization has controlled processes in place to support its financial reports.  

  Having such procedures enable auditors to get their job done quickly due to reliable, clearly stated and followed controls. The more organized and prepared you are, the more likely you will avoid running into issues within your audit.  

  Not only do lease audit procedures better prepare you for an upcoming audit, but lease audit procedures can also provide additional business benefits through supporting optimization of your lease portfolio. Below, we dive into how lease audit procedures can help your business. 

  6 Lease Audit Assertions

  1. Completeness: All leases and lease-related transactions have been identified, recorded, and reported accurately in the financial statements.
  2. Existence/Occurrence: The assets and liabilities related to leases actually exist and have occurred.
  3. Valuation/Allocation: The assets and liabilities related to leases have been valued and allocated correctly.
  4. Cut-off: All lease transactions have been recorded in the correct accounting period.
  5. Rights/Obligations: The company has the right to use the leased asset and the obligation to make lease payments.
  6. Presentation and Disclosure: Lease information has been presented and disclosed in the financial statements in accordance with applicable accounting standards.

  These assertions are used by auditors to assess the accuracy and completeness of a company’s lease accounting. By testing these assertions, auditors can help to ensure that the company’s financial statements are accurate and that they comply with applicable accounting standards.

  How to Better Prepare for the Audit Process for Lease Accounts

  Anticipate Audit Needs 

  Lease audits focus on providing an independent evaluation of asset control and risk. This evaluation is designed to drive continuous improvement to an organization’s processes and system.  

  The Journal of Accountancy outlines a number of challenges for auditors when approaching the leases section of the audit. Gaining a broader understanding of these challenges is an excellent first step in preparing for lease audit procedures under ASC 842.  

  When preparing for an audit, the goal for accounting and finance professionals is to ensure their books are in order for when the auditors come around. A significant component of this preparation is completeness assertion, which translates to ensuring all transactions that were supposed to be recorded have been recognized in the financial statements.  

  Nearly all (99%) senior finance and accounting professionals have concerns about misreporting company lease information. 

  Avoid Costly Mistakes 

  The absence of lease audit procedures can present a challenge when leased asset information is not readily available or in a central database. 

  To comply with the new lease accounting standards, all lease arrangements and amendments need to be identified, reviewed and abstracted. Financial statements are impacted with lease-related assets, receivables, liabilities and deferred inflows of resources coming on to the statement of net position.  

  Essentially, preparing for an audit means looking at an organization’s leased asset portfolio and ensuring all relevant stakeholders are assessed and addressed.  

  New lease accounting standards, like ASC 842, are likely to get more attention than usual from the auditors. Delays or missteps can put your business’ audit at risk of costly mistakes, such as increased audit fees, fines or damage to company and personal reputation. But having everything ready for the auditors puts the liability on them to get their job done accurately and efficiently.  

  Ensure Accurate Compliance 

  As mentioned earlier, the key to successfully completing lease audits is being prepared and organized. 

  The end goal of lease audit procedures is to ultimately eliminate the need to worry by ensuring procedures are identifiable and support compliance under the new lease accounting standards. 

  By having a centralized database and lease accounting system in place, finance and accounting professionals will not only be able to get the information they need quickly and easily, they will also subconsciously adopt time-tested lease audit procedures as a science.

  The post Lease Audit Procedures: Why Do They Matter? first appeared on Visual Lease.]]> https://visuallease.com/gasb-87-summary-page/ Wed, 26 Oct 2022 15:43:08 +0000 https://visuallease.com/?p=7627

  

  GASB 87 effective date

  Deadline for companies	Fiscal years beginning after June15, 2021

  GASB 87 Summary

  Issued by the Governmental Accounting Standard’s Board, GASB 87 is the new lease accounting standard for US government entities. All entities that prepare financial statements in accordance with GASB standards must comply with GASB 87 for fiscal years beginning after June 15, 2021.

  Who is subject to GASB 87?

  

  State, local and municipal governments

  

  Public benefit corporations and authorities

  

  Public employee retirement systems

  

  Public utilities, hospitals and other healthcare providers

  

  Public colleges and
  universities

  GASB 87 impacts lease accounting and reporting for both lessees and lessors as follows:

  

  Lessees must recognize lease liabilities and intangible right of use (ROU) lease assets on their statements

  

  Lessors must recognize lease receivables and deferred inflows of resources on their financial statements

  

  Was GASB 87 postponed?

  The Governmental Accounting Standards Board postponed the implementation date for GASB 87 back in May of 2020. The extension was implemented in order to give CPA firms and entities an opportunity to prepare to implement the new standard after disruptions during the COVID-19 pandemic.

  What does GASB 87 do?

  In 2017, the Governmental Accounting Standards Board (GASB) published the lease accounting standard GASB 87. The organization is the source of the accounting principles (GAAP) used by state and local governments in the United States.

  GASB 87 was created to increase visibility into lease obligations and remove ambiguity around lease obligations in financial disclosures, particularly balance sheets and income statements.

  What did GASB 87 replace?

  GASB 87 replaces the current operating and capital lease categories with a single model for lease accounting based on a definition of leases as contracts that convey control of the right to use a non-financial asset. The new rules require lessees to recognize a lease liability and an intangible asset while lessors are required to recognize lease receivables and a deferred inflow of resources on their financial statements.

  How Does GASB 87 Change the Balance Sheet?
  GASB 87 requires organizations to now record most leases on the balance sheet.
  For most organizations, this is a massive administrative lift. Leases are complex legal documents, sometimes hundreds of pages, which require trained professionals to negotiate and interpret; with countless obligations, clauses and critical dates to keep track of.
  Leases are also dynamic. Terms change all the time as organizations take on new spaces, scale back or renegotiate, and you must account for every change under GASB 87.
  To produce accurate lease accounting reports, the following information needs to be collected and tracked:
  
  Lease terms
  
  Discount rate
  
  Rent payment amounts and dates
  
  Lease option terms
  
  Variable or percentage rent terms
  
  Residual value guarantee terms
  Definition of a Lease Under GASB 87
  

  Under GASB 87, a lease is defined as a contract that conveys the right to use another entity’s nonfinancial asset for a period of time, including:

  • The ability to obtain the present use of the asset as specified in the contract

  • The right to control how the underlying asset is used

  

  Common examples of leased assets recorded under GASB 87 are:

  • Equipment for day-to-day operations (office equipment, medical equipment, telecommunications equipment, IT equipment)

  • Vehicles (automobiles, vans, trucks)

  • Real estate (property, buildings, offices, warehouses)

  

  In addition, some leases are exempt under GASB 87, such as:

  • Leases of certain types of intangible assets (e.g., patents, software licenses, the rights to explore for or exploit natural resources such as oil, gas, minerals and similar nonrenewable resources)

  • Leases of biological assets, including timber, living plants and living animals

  • Leases of inventory

  • Service concession agreements

  GASB 87 Compliance Software
  Visual Lease’s GASB 87 lease accounting software is the perfect tool to keep all of your leases in one single location, while making sure you stay completely GASB 87 compliant.
  GASB 87 Software Checklist
  When planning and preparing for GASB 87 and evaluating lease accounting software, naturally you’ll want to look for a solution that specifically supports GASB 87, which requires all contracts that meet the definition of a lease to be recognized in financial statements and classified as a finance lease.
  In addition, to ease the transition to GASB 87 and streamline the lease accounting process, you’ll want to look for a solution with the following capabilities and benefits.
  
  
  Intuitive and easy to use
  • Streamline lease data collection with other business applications, such as ERPs and accounts receivable
  • Enable automated calculations and financial reports
  • Support configurable data fields and reports to match your compliance requirements and organizational needs
  • Centralize all your lease information within one system
  
  Intuitive and easy to use
  • Incorporate years of lease financial management experience built within each feature and functionality
  • Prioritize future-readiness with ongoing investments in R&D
  • Focus on data security and privacy
  
  Intuitive and easy to use
  • Provide data visualization for visibility into lease details and costs, enabling more informed business decisions
  • Streamline lease detail management via system alerts for lease events and changes that could impact your ongoing financial reporting
  Lease Accounting Calculations

  Lease Accounting for Lessees

  Under GASB 87, lessees must recognize a lease liability and a right to use asset for all qualified leases.

  • The lease liability is generally calculated as the present value of payments the lessee expects to make during the lease term, including any contract renewal options the lessee is reasonably certain to exercise.

  • The lease asset is calculated as the lease liability plus any prepayments or initial direct costs, minus any lease incentives at or before commencement of the lease.

  As payments are made on the lease, the liability amount is reduced and interest expenses are recognized. The asset is amortized over the length of the lease term or over the life of the asset (whichever is shorter), unless the lease contains a purchase option that the lessee has determined is reasonably certain to be exercised, in which case, the lease asset should be amortized over the useful life of the underlying asset.

  Lease Accounting for Lessors

  Under GASB 87, lessors must recognize a lease receivable and a deferred inflow of resources on the financial statements. Just as with lessee schedules, the calculations can be complex.

  • At the start of the contract, the lease receivable is generally calculated as the present value of lease payments the lessor expects to receive over the term of the lease, minus any provision for estimated uncollectible amounts.

  • The deferred inflow is calculated as the lease receivable plus any payments made at or prior to the commencement of the lease.

  As the lessor receives payments, the lease receivable amount is reduced and interest revenue is recognized. The deferred inflow continues to be recognized as revenue over the life of a lease.

  Lease Accounting Remeasurements

  Organizations remeasure the value of lease assets and liabilities when there is some significant event or material change in circumstances, including:

  • Modification of a lease term, size or payment obligations — for example, the extension or expansion of a lease or the exercising of a lease option

  • Lease contraction due to full or partial lease termination or abandonment — for example, when an abandoned space is sublet, causing the abandonment of the primary asset

  • The full or partial impairment of a lease

  Remeasurements type	Description
  Modification	Any modification of lease term (i.e., change in payment term, extension of lease term, etc.)
  Full Impairment	Due to some event, the asset no longer has any value, but the organization still has obligation under the lease.
  Partial Impairment	Due to some event, the asset still has a value, but the value has been reduced by some amount or percentage.
  Full Termination	A lessee has ended the lease contract and no longer has the lease liability or asset on the books.
  Partial Termination	A lessee reduces the use of some portion of the asset (e.g., reduces total square footage of lease by terminating some portion), which reduces the amount of liability or asset on the books.
  Full Abandonment	A lessee decides to no longer use the entire asset as of some specific date; the lease contract is still in place and the asset remains as a liability on the financial statement.
  Partial Abandonment	A lessee decides to no longer use a portion of the asset as of some specific date; the asset remains as a liability on the financial statement.

  Disclosure Reporting

  

  For both lessees and lessors, GASB 87 now requires disclosure reports that provide aggregated totals and detailed supporting data such as:

  • Qualitative and quantitative information about leases, including variable payments not included in measurement of liability

  • Significant assumptions and judgments made when measuring leases

  • The amounts recognized in financial statements

  
  Lessee disclosure reports must provide:
  • Fully detailed lease descriptions
  • Amount of total leased assets — both gross and net figures
  • Future lease payment schedules, including interest payments
  
  Lessor disclosure reports must provide:
  • General descriptions of all lease arrangements
  • Inflows of resources, including lease and interest revenue recognized in the reporting period
  • Revenue from variable payment components not included in the lease receivable
  These new standards require organizations to gather and manage substantial amounts of data to generate disclosure reports related to real estate, equipment, vehicles, land and any other leases an organization holds.

  What To Look For in Lease Accounting Software

  Spreadsheets aren’t designed to handle the dynamics and complexity that impact the accounting calculations — lease transactions can result in hundreds of permutations and calculations. Most likely your current lease process has gaps that will need to be addressed when moving to adopt GASB 87. Many of these gaps can be addressed through the use of technology. Lease accounting software can help you meet GASB 87 requirements and maintain compliance beyond the initial reporting period.

  Evaluating lease accounting technology

  The right lease accounting software solution provides you with the proper tools to manage lease data and changes, perform the necessary calculations and generate reports according to GASB standards. In addition, choosing lease accounting and management software that has the capabilities described below will help to further streamline the accounting process and ensure ongoing GASB compliance.

  

  Lessee and lessor accounting
  Disclosure reporting capabilities
  Automated calculations
  Journal entries

  

  Lease amortization schedule
  Roll-forward reporting
  Handling for regulated leases
  Handling for short-term leases

  

  Ongoing compliance via
  modification, impairment,
  termination capabilities
  

  Compliance starts with a lease subledger
  GASB 87 introduces a much higher level of scrutiny. Now, organizations have significantly more lease information to track, update, calculate and report on. Given the cross-functional, complex and evolving nature of lease language, any lease accounting solution should start with a strong lease management software to act as a single system of record for all lease data and lease financials.
  Any sustainable solution should offer:
  
  Configurable tools to handle any lease scenario across any asset type to maintain a reliable, up-to-date source for qualitative lease details such as terms, changes and dates
  
  Integration capabilities to other cross-functional systems to maintain a single source of truth
  
  A comprehensive audit trail to track and reconcile any changes
  
  Defined user roles for anyone that touches leases and integrated guardrails to ensure any changes are in accordance with internal accounting procedures
  
  
  
  A lease software solution helps to streamlines this very complex process by providing automated calculations and workflows to:
  • Ensure that leases and the related assets, liabilities, revenues and expenses are accounted for consistently
  • Eliminate human error and reliance on formulas and cumbersome spreadsheets • Ensure accuracy by having all data and calculations in one system
  • Integrate leases and their pertinent data, such as liabilities, lease assets, interest expenses and revenue inflows, to the financial statements
  • Automatically generate journal entries and lease amortization schedules using the system data
  Lease reassessments and remeasurements
  With the enhanced level of lease visibility that GASB 87 requires, an organization’s lease accounting must explain all lease changes on the financial statements. This includes additions or subtractions due to new leases, modifications, impairments and terminations, as well as regular amortization.
  Accounting for lease remeasurement and reassessments is a common roadblock to sustainable compliance as accounting teams must rely on cross-functional stakeholders adhering to internal procedures as they manage lease modifications.
  Using lease technology to organize, update and manage lease data allows you to integrate lease renewals and other modifications into your accounting process, ensuring they are captured accurately and reported in a timely manner.
  Roll-forward reports are a valuable tool for meeting this requirement, providing a detailed disclosure of lease financials including period over period changes to lease assets and liabilities.
  By choosing a technology platform that automates roll-forward reporting, your organization can streamline data gathering, calculations and reporting while ensuring that the process meets compliance and disclosure requirements.
  Alerts, approvals, internal controls and audit trails
  Given the cross-functional nature of lease management, defined user roles and alerts and comprehensive approvals hierarchies are critical to maintaining a single source of truth.
  Look for systems that can streamline cross-functional workflows both internally and externally, with project management systems that can notify appropriate stakeholders when upcoming critical dates are near.
  Auditability cannot be compromised. Approvals hierarchies are important to make sure that mistakes – or intentional malfeasance – are identified. Audit trails must be maintained to track every change.
  
  The post What is GASB 87 & What Do I Need to Know first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-reports-continued-accelerated-growth-in-third-quarter/ Thu, 13 Oct 2022 13:30:47 +0000 https://visuallease.com/?p=7605 Leading provider of lease accounting, administration and optimization software continues to make strategic investments to elevate its technology, services and team Woodbridge, NJ – October 13, 2022 — Visual Lease,...
  The post Visual Lease Reports Continued, Accelerated Growth in Third Quarter first appeared on Visual Lease.]]>

  Leading provider of lease accounting, administration and optimization software continues to make strategic investments to elevate its technology, services and team

  Woodbridge, NJ – October 13, 2022 — Visual Lease, the #1 lease optimization software provider, today announced strong third quarter results, achieving sustained, double-digit growth in annual recurring revenue year over year and a record number of new customers acquired. Visual Lease is currently used by more than 1,000 public and private companies, as well as government entities, to become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases.

  “As companies set their strategies for 2023, many are laser-focused on finding ways to reduce risk, cut costs and improve internal controls,” said Visual Lease CEO, Robert Michlewicz. “We’re committed to being the solution provider that uniquely helps organizations accomplish those mission-critical goals through their lease accounting and administration processes while setting them up for long-term success.”

  In Q3 2022, Visual Lease:

  Software, Service & Growth

  • Provided early access for select clients to a modernized user interface to validate the performance and usability enhancements made to its robust yet intuitive platform. The updated UI release will be available to all users later this month.
  • Released Enhanced Fund Accounting functionality, providing VL users in the government sector the ability to easily track and record lease transactions on a modified accrual basis for fund accounting and a full accrual basis for government-wide reporting.
  • Earned additional industry recognition as the leading provider of lease administration and lease accounting software:
    • Received a 2022 PropTech Breakthrough Award for Overall Lease Management Company of the Year.
    • Named a finalist of The 2022 SaaS Awardsfor the Best SaaS Product for Business Accounting or Finance.
    • Maintained its position as a Leader in both the Lease Administration and Lease Accounting categories on G2.
  • Included in the Inc. 5000 list of fastest-growing private companies in America for the third consecutive year, named among the top 100 fastest-growing private companies in New Jersey and the 259th fastest-growing private company in the New York City area.

  Strategic Hires

  • Announced Robert Michlewicz as CEO, and Marc Betesh, the founder and former CEO, as Executive Chairman – a transition in management structure that will further accelerate the organization’s growth.
  • Appointed Amie Durr as Senior Vice President of Product, responsible for ensuring that Visual Lease continues to support organizations’ evolving business needs by strengthening their lease accounting and administration processes while expanding its integration capabilities.

  Brand Recognition

  • Unveiled its newest report from The Visual Lease Data Institute, The 2022 Lease Market Analysis: Lease Accounting Readiness, which explores common lease accounting challenges and roadblocks experienced by the two largest markets that are moving to adopt the new accounting standards: private companies and government entities. Findings from the research have been featured in Wall Street Journal’s CFO Journal newsletter, CPA Practice Advisor, Globe St., Accounting Today and more.
  • Received a Silver Stevie Award for Great Employers in the Employer of the Year in the Computer Software category.
  • Named a Best Place to Work in NJ by NJBIZ for the third consecutive year and ranked amidst the top third of medium-sized companies (50 – 249 employees), moving up 15 positions in its ranking on the list, year-over-year.

  Alliance Partners

  • Achieved double-digit, year-over-year growth in Alliance-driven annual recurring revenue through key initiatives, including:
    • Expanded Alliance Partner program by welcoming ERE and others to its network of partners.
    • Further strengthened its existing relationship with Blue Sky to include a managed services agreement.
    • Hosted thought leadership webinars with partners Grant Thornton and RSM US LLP.
  • Launched the Visual Lease Partner Marketplace, a section of its corporate website dedicated to connecting current and potential customers with its trusted network of Alliance Partners for access to top-tier support, including assistance with lease abstraction, data management, lease audit prep, portfolio reporting and analytics and more.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.
  
  To learn more about a career at Visual Lease, visit the Career Site.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts

  Karen Lee
  Caliber Public Relations
  T+1 929 269 4436
  karen@calibercorporateadvisers

   

  The post Visual Lease Reports Continued, Accelerated Growth in Third Quarter first appeared on Visual Lease.]]> https://visuallease.com/exciting-announcement-vls-first-chief-customer-officer/ Wed, 12 Oct 2022 13:00:26 +0000 https://visuallease.com/?p=7575

  

  It’s been a pivotal year for Visual Lease. Over the past several months, we welcomed Robert Michlewicz as our new CEO, Amie Durr as SVP of Product and continue to experience accelerated growth in our customer, partner and employee base.

  And while there are many factors that have contributed to our growth, we continue to have one consistent priority: our customers. I am honored and excited to take on the role of Chief Customer Officer to ensure our customers get the greatest value from their partnership with Visual Lease.

  VL’s foundation.

  In our 25+ years of business, we’ve maintained a customer-centric mindset and approach. The VL team shares a deep passion for discovering our customers’ goals and challenges and works hard to shape our platform, services and partnerships to make their jobs easier. In fact, Visual Lease was originally created by our founder, Marc Betesh, after directly observing how organizations struggled to centralize and control their lease portfolios, and how it impacted their businesses.

  VL’s commitment.

  We have a customer base of more than 1,000 public, private and government organizations that is rapidly growing. This newly created office of the Chief Customer Officer will ensure that our customers continue to receive a high level of focus and get even greater value from Visual Lease. We will actively listen to their challenges and how market changes impact them. We will connect them to each other, so they can learn and collaborate. We will introduce them to additional ways our solutions, services and partnerships can benefit them. We will continue to use their perspectives and insights to shape our roadmap for the future.

  So, while 2022 has been a tremendous year for VL and our community of customers and partners, we know that there are new milestones and heights ahead that we’ll reach together!

  The post Exciting Announcement: VL’s First Chief Customer Officer first appeared on Visual Lease.]]> https://visuallease.com/lease-accounting-how-to-ensure-reliable-effective-implementation-and-adoption-2/ Thu, 06 Oct 2022 15:38:56 +0000 https://visuallease.com/?p=7598

  

  On-demand webinar summary

  Businesses commonly struggle to adapt the new methodologies and technology to achieve lease accounting compliance. In fact, one-third (33%) of private companies are still not fully prepared to transition to ASC 842.

  Our recent webinar, Lease Accounting: How to Ensure Reliable, Effective Implementation and Adoption, lease accounting experts from Visual Lease and RSM shared insight into:

  • Proven processes and tools to accelerate your progress
  • How to get started now and reduce the risk of error
  • Necessary, critical tips to ensure accurate lease accounting data

  

  Joe Fitzgerald

  SVP of Lease Market Strategy
  Visual Lease

  

  Matt Watson

  Director, Implementation Services
  Visual Lease

  

  Troy Sheehan, CPA

  Director, Consulting
  RSM US LLC

  

  Laura Adams

  Business Applications Manager, Consulting
  RSM US LLC

  To learn more, read the summary below or view the on-demand webinar. 

  What’s required to adopt ASC 842 

  To be successful in your lease accounting project, you must dedicate enough time, effort and resources.    

  “There are a lot of details that go into having a successful implementation. The key one is project management of all the different work streams that go into your Day 1 activities,” said Joe Fitzgerald. 

  The main activities you’ll need to track are lease data collection and lease technology implementation. Doing this right ensures your business has a comprehensive lease portfolio, reliable lease data and accurate reports.  

  Lease data collection and abstraction is particularly time-consuming, but essential to have a full picture of your leased assets. You will need to inquire with identified departments that utilize leased assets, enter into lease transactions and/or house lease agreements. These departments typically include corporate IT, G&A, legal, procurement and tax. 

  • Corporate IT
    • Responsible for: Leased computer and telephone equipment
  • General and Administration (G&A)
    • Responsible for: Leased copiers, cars, remote office locations, break room equipment
  • Legal
    • Responsible for: Reviewing leases and maintaining lists of executed leases
  • Procurement
    • Responsible for: Sourcing lease transactions
  • Tax
    • Responsible for: Overseeing preparation of personal property returns, which typically requires reporting leased assets

  Considerations to maintain ASC 842 compliance 

  Organizations often experience similar concerns related to sustaining lease accounting compliance post-initial adoption (Day 2). These commonly include: 

  • Resource constraints,  
  • Ongoing lease maintenance (reassessment, modifications and remeasurements), 
  • Ongoing collection and abstraction of new leases, 

  • Review of service contracts and embedded leases, 
  • And more. 

  To address these concerns, organizations may choose to outsource their Day 2 lease accounting efforts, rather than keeping the work in-house. Both options present pros and cons related to effort, cost, risk and organizational impact.  

  For a detailed breakdown relating to the pros and cons of outsourcing vs. insourcing your lease accounting, view the on-demand webinar: Lease Accounting: How to Ensure Reliable, Effective Implementation and Adoption. 

  The post Lease Accounting: How to Ensure Reliable, Effective Implementation and Adoption first appeared on Visual Lease.]]> https://visuallease.com/how-do-the-lease-accounting-standards-impact-your-footnote-disclosures/ Wed, 05 Oct 2022 17:18:35 +0000 https://visuallease.com/?p=7583 Do your lease footnote disclosures comply with the new lease accounting standards?   The footnotes of your financial statements must include certain information from your lease contracts. And with the newly...
  The post How Do the Lease Accounting Standards Impact Your Footnote Disclosures? first appeared on Visual Lease.]]>

  Do your lease footnote disclosures comply with the new lease accounting standards?  

  The footnotes of your financial statements must include certain information from your lease contracts. And with the newly implemented FASB, GASB and IFRS lease accounting standards, disclosure requirements have become more complicated. 

  What are footnote disclosures? 

  Footnote disclosures explain how an organization determined the numbers in their financial statements, such as their balance sheet (or statement of financial position), cash flow statements and income statement (or statement of activities). They highlight any differences the organization has made to its accounting methodologies from previous years and give an overall sense of its current and projected financial well-being. 

  Organizations must also fully disclose future contingencies, commitments and contractual obligations in their financial statements. Often, they use footnotes to provide this information.  

  How footnote disclosure requirements changed under ASC 842 

  Before ASC 842, footnote disclosure requirements were less detailed, and many organizations could easily manage their leases through spreadsheets. But the new lease disclosure requirements are much more complicated, making it nearly impossible to use spreadsheets to manage leases and track updates anymore. 

  For example, under ASC 840, finance leases (formerly called capital leases) had to be recorded on an organization’s balance sheet, but operating leases didn’t. Instead, they were listed in the footnote disclosures. 

  Under ASC 842, operating lease assets and liabilities must be “on the books” and recorded on the balance sheet, which can impact the ratios used to measure the organization’s financial health. To avoid confusion, it’s important to explain these differences in the operating lease footnote disclosures in a clear and organized way. 

  Disorganized footnote disclosures waste time and money 

  Leases are complex contracts that come in many shapes and sizes. Moreover, they can often be overlooked if not itemized and managed properly, resulting in increased financial risk for an organization. 

  Proper lease accounting management hinges on accurate footnote disclosures. Inaccurate disclosures can waste accounting professionals’ time and undermine an organization’s operability and reputation. 

  Furthermore, footnotes that are unclear or disorganized can easily bury important information. This can lead to mistakes and additional costs when preparing the annual financial statements both internally and externally. 

  The right tool can simplify footnote disclosures 

  Although footnote disclosures under the new lease standard can be overwhelming and complex, the right tool can vastly simplify the process. 

  To stay compliant, you’ll want to use a software solution that meticulously tracks lease accounting updates. It should also be easy to use yet robust enough to organize data from various sources. 

  A comprehensive tool like Visual Lease can generate audit-ready journal entries, disclosures and reports to help you comply with ASC 842, IFRS 16 and GASB 87 lease accounting standards. 

  The right lease management software should also keep all your lease accounting data in one place so you can easily generate statements and find the insights you need. After all, lease accounting shouldn’t just keep your organization compliant — it should also uncover new strategies to help you save money and time. 

  The post How Do the Lease Accounting Standards Impact Your Footnote Disclosures? first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-appoints-first-chief-customer-officer/ Wed, 05 Oct 2022 14:00:58 +0000 https://visuallease.com/?p=7572 Alexandra Betesh to amplify the voice of the customer in the company’s solutions, services and strategic partnerships Woodbridge, NJ – October 5, 2022 — Visual Lease, the #1 lease optimization...
  The post Visual Lease Appoints First Chief Customer Officer first appeared on Visual Lease.]]> Alexandra Betesh to amplify the voice of the customer in the company’s solutions, services and strategic partnerships

  Woodbridge, NJ – October 5, 2022 — Visual Lease, the #1 lease optimization software provider, today announced its first Chief Customer Officer, Alexandra Betesh. Having most recently served as the company’s SVP of Corporate Strategy, Betesh brings nearly a decade of customer service experience to this new position. The introduction of this C-level office will accelerate and deepen Visual Lease’s ability to translate customer feedback into meaningful enhancements to its products, services and strategic alliances.

  “Visual Lease is on a strong growth trajectory. As we continue to expand our customer base, we need to devote extra effort to listening to our customers and making sure their voice is heard and articulated across our business,” said Visual Lease CEO, Robert Michlewicz. “Alex is the ideal candidate for this important new leadership role. She has deep domain experience designing and delivering customer-facing services, a wealth of product knowledge and is extremely passionate about the Visual Lease customer experience. Most importantly, our customers will benefit by having a C-level leader dedicated to increasing the value they get from their partnership with Visual Lease.”

  In this new role, Betesh will draw upon her experience having built and scaled Visual Lease’s Client Services department to ensure that VL customers are effectively represented across all areas of the company. With this transition, Visual Lease’s Customer Success teams will report to Betesh to ensure they are working together to represent and support VL users.

  “Visual Lease has a very diverse and expansive customer base. In this new role, I will drive deeper engagements with them so they can ideate and evolve with us. With changing market conditions, there is a great need for customers to reduce risk, cut costs, improve operational efficiency and better align their leases with their corporate goals—while maintaining lease accounting compliance. My team and I will amplify their needs and perspectives throughout our organization to ensure customers get the greatest value from Visual Lease.” Betesh stated.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease
  

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contact

  Karen Lee
  Caliber Public Relations
  T+1 929 269 4436
  karen@calibercorporateadvisers

   

  

  The post Visual Lease Appoints First Chief Customer Officer first appeared on Visual Lease.]]> https://visuallease.com/how-to-prepare-for-asc-842-adoption-2/ Mon, 03 Oct 2022 15:06:32 +0000 https://visuallease.com/?p=7566

  

  On-demand webinar summary

  Are you confident that you have the resources you need to prepare your business for ASC 842 adoption? It’s important to anticipate and plan on meeting important milestones throughout your lease accounting project tTo ensure a smooth transition and achieve compliance, it’s important to be aware of the important milestones ahead of you.  

  In our recent webinar, How to prepare for ASC 842 adoption, lease accounting experts Joe Fitzgerald, SVP of Lease Market Strategy at Visual Lease, and Lisa Kaestle, Director of Accounting Advisory Services at Grant Thornton, shared insights and lessons learned from public companies, along with useful tips and insights private companies can use to successfully adopt ASC 842.  

  

  Joe Fitzgerald

  SVP of Lease Market Strategy
  Visual Lease

  

  Lisa Kaestle

  Director, Accounting Advisory Services
  Grant Thornton

  About Visual Lease 

  Visual Lease makes easy-to-use software to help organizations manage and account for their leases, and stay compliant with US-GAAP, IFRS and GASB lease accounting standards. 

  About Grant Thornton 

  With over 400 successful lease adoptions, Grant Thornton has seen it all. Between inefficiencies, errors, and restatement concerns, leasing will be at the center of discussions during your year-end audit. Find out more about our partnership and their self-service kit. 

  Here are some key takeaways from the webinar: 

  Lessons learned from public companies 

  Public companies have been reporting under ASC 842 for three years now. As a result, there have been many lessons learned in both initial adoption and ongoing compliance (typically referred to as Day 2) that private companies can use to their advantage.  

  • Adoption takes longer than expected 

  Preparing for ASC 842 compliance can certainly be time-consuming, but many companies don’t realize just how long it could take.  

  In the webinar, Lisa Kaestle described how initial adoption could easily take anywhere from 3-6 months. “It’s a long process and a lot of times, companies really need outside help. They need to make sure they collect all of their lease data – and that they work with the right vendor. There are a lot of obstacles to think about, including how to compile proper documentation for auditors,” said Lisa.  

  It’s important to get started on your lease accounting project as soon as possible to give your cross-functional teams the time they need to prepare for adoption. It’s never too early to start this process. 

  • Ensure you remain compliant for Day 2 

  Once you’ve achieved ASC 842 compliance, it’s equally important to remain compliant. As lease terms change over time, it’s critical to have the right processes and procedures in place to ensure your lease data is up-to-date.   

  The most effective way to do this is by getting all your lease data in one centralized location, so your teams can easily access and update your lease portfolio as needed. 

  “Day 1 is a major lift for any business, but if you don’t have those processes put in place for Day 2, it’s going to be the same big lift each time you go through an audit to prove your statements are materially correct and accurate,” stated Lisa. 

  • Identify the appropriate software solution

  Much of your business’ lease accounting success hinges on what software you choose to implement. It’s important to evaluate different solutions and find which one best fits your business needs.  

  It’s also important to understand that Excel is rarely the right approach, even for smaller portfolios. Further, Excel is not a strong software choice for Day 2 lease accounting.  

  At minimum, you’ll want to make sure the software provides: 

  • Automated calculations and reports backed by a SOC I Type II certification 
  • Centralized lease data that enables cross-departmental teams to have complete visibility 
  • Easily accessible, transparent historical data and audit trail functionality 

  Six steps private companies can take for the adoption process 

  Visual Lease and Grant Thornton are very experienced in helping clients with ASC 842 adoption. Together, they have assisted roughly 1,500 companies achieve compliance with the new lease accounting standards. 

  Based on their strong understanding of what it takes to be successful, they shared six steps to achieve lease accounting compliance.  

  • Kickoff

    • Learn the standards – and identify milestones up-front how to get started. Also, , identify a project lead and introduce potential cross-departmental stakeholders to ASC 842.  

  • Identify All Leases

    • Assess your business’ lease population and define your approach to identifying known (and unknown) leases.  

  • Implement Technology

    • Import your lease data and utilize configurable software, like Visual Lease, to streamline your work and ensure completeness, consistency and ease of use.  

  • Analyze Lease Data

    • Develop an efficient adoption strategy to make practical expedient and policy elections. Use third-party resources, trainings and checklists to ensure you extract lease data correctly. 

  • Design and Document

    • Utilize draft memo templates to document your compliance from adoption and going forward, and consider Day 2 plans.  

  • Complete Adoption and Go-Live

    • Finalize and test your reporting ahead of your audit, and take advantage of third-party advisors, like Grant Thornton, for disclosure guidance to be confident and prepared for your audit. 

   

  To learn more, view our on-demand webinar: How to prepare for ASC 842 adoption. 

  Visual Lease and Grant Thornton teamed up to provide you with a proven playbook for an easy transition to ASC 842. Learn how Grant Thornton can simplify the transition to the new lease accounting standard, and how Visual Lease software can provide you with confident, ongoing compliance. 

   

   

  The post How to prepare for ASC 842 adoption first appeared on Visual Lease.]]> https://visuallease.com/the-future-of-accounting-goes-beyond-excel/ Fri, 30 Sep 2022 15:57:20 +0000 https://visuallease.com/?p=7560 By: Joe Fitzgerald, Senior Vice President of Lease Market Strategy  Spreadsheet applications are easily the most important and universal accounting tools used today—so much so that you’d never guess the...
  The post The Future of Accounting Goes Beyond Excel first appeared on Visual Lease.]]>

  By: Joe Fitzgerald, Senior Vice President of Lease Market Strategy 

  Spreadsheet applications are easily the most important and universal accounting tools used today—so much so that you’d never guess the first version was actually developed as a school project.

  As the story goes, in 1978, computer programmer Dan Bricklin was pursuing an MBA at Harvard Business School. His finance class was tasked with an assignment to make financial projections for a hypothetical corporate merger using ledger sheets, the painstaking way that accountants manually tallied numbers in the bygone analog era.

  Bricklin, apparently intent on getting an A while also eluding the heavy workload, developed a spreadsheet on a personal computer to electronically process the calculations. The idea was completely novel and would prove to be revolutionary. In less than a decade, spreadsheet programs like Lotus 1-2-3 and Microsoft Excel were dominating the market. Nearly 40 years later, not much has changed. Excel and (now) Google Spreadsheets are still widely used applications in accounting – a fact that astounded Bricklin himself. “It’s like whoa, we haven’t thought of something better yet,” he said in a 2015 interview with Quartz.

  It is surprising that Excel continues to be the prevailing accounting practice because it is limited in addressing today’s sophisticated accounting practices and standards, and for that reason, it has become notoriously error-prone.

  Here are some of the ways that spreadsheets are falling short for businesses.

  Managing Stakeholders and Line Items

  Accounting requires managing a lot of moving parts. Many businesses have several – and sometimes, even hundreds of assets and multiple stakeholders (Real Estate, Finance, Legal and HR, among others), which each translate into different line items on a balance sheet.

  When it comes to spreadsheets, this ever-growing list of assets and stakeholders is a hotbed for errors. Research has repeatedly shown that 90% of spreadsheets contain errors and 50% of spreadsheet systems have “material defects.” Not only can these errors be destructive to business fundamentals and operations, but poor accounting practices can lead to failed audits, internal control deficiencies, fines, blown debt covenants and reduced credit ratings.

  Some companies have been transitioning to sophisticated and targeted software programs to help mitigate errors in bookkeeping, while also giving financial professionals time to perform higher-level tasks. In lease accounting, for example, specialized software is designed to address the critical and often nuanced needs of managing real estate leases, creating space for collaboration across different departments and stakeholders. These types of systems can track lease details both at the property level and throughout a portfolio, resulting in accurate financial reporting, efficient auditing and also, guaranteeing that critical deadlines are met.

  This has become a common trend throughout the business sector. There is a widespread exodus to more targeted accounting solutions. Mark Garrett, the former CFO at Adobe Inc., summed up the problem with spreadsheet applications back in 2017 when he told the Wall Street Journal, “I don’t want financial planning people spending their time importing, exporting and manipulating data, I want them to focus on what the data is telling us.” Adobe transitioned away from Excel last year.

  Navigating Complexities

  New lease accounting standards are also minimizing the effectiveness of spreadsheet applications like Excel. The Financial Accounting Standards Board (FASB) issued accounting guideline ASC 840 in 1976, two years before Bricklin first dreamed of a spreadsheet. ASC 840 has been the practicing standard until 2019, when FASB’s ASC 842 went into effect for public companies, requiring these enterprises to record leased assets on the balance sheet. And this year, the ASC 842 standard goes into effect for all private companies, as well. These regulations are a shake-up to the standard accounting practice, requiring more sophisticated financial calculations and involved accounting practices—and spreadsheets just aren’t designed for this level of complexity.

  The business community at large is recognizing the limitations of spreadsheet applications as a result, and many companies—Levi’s, P.F. Chang’s and Coca-Cola, to name a few—are transitioning to tailored accounting solutions that better address modern practices. “Excel just wasn’t designed to do some of the heavy lifting that companies need to do in finance,” said Paul Hammerman, a business applications analyst at Forrester Research Inc., in an interview with the Wall Street Journal.

  The pandemic has also ushered in changes in business strategy that is leading to the need for more sophisticated technology. Real estate has been central to these changes because for many businesses, real estate costs became a major liability during the pandemic. In the Commercial Real Estate in 2022: Outlook for an Industry in Recovery survey from Visual Lease, 100% of real estate professionals reported their tenants had requested changes to a commercial property lease in response to the pandemic, and in a separate survey conducted by Deloitte, 67% of respondents said they are executing a real estate rationalization program to either reduce, rightsize, expand or reduce ownership responsibilities. Under new lease accounting standard ASC 842, accountants are required to record these modifications.

  Bricklin was right; it is time to find something better. As accounting standards and business practices evolve, business organizations need to upgrade their technology, as well—and the toolkit should include a dedicated accounting software program that is designed to accommodate accounting complexities and modifications while empowering companies to maintain compliance with the new accounting standards.

  That is certainly true when it comes to proper lease management and accounting. We are seeing more and more organizations recognize the need for dedicated technology solutions to not only achieve, but maintain compliance with new standards and regulations. These solutions are bringing the industry into a new age, and it’s about time.

  The post The Future of Accounting Goes Beyond Excel first appeared on Visual Lease.]]> https://visuallease.com/lease-management-unlocking-roi-opportunities-within-your-lease-portfolio-2/ Mon, 19 Sep 2022 19:01:07 +0000 https://visuallease.com/?p=7540

  

  On-demand webinar summary

  Lease management is integral to achieve and maintain lease accounting compliance. But that’s not the only opportunity it presents.  

  In fact, 100% of recently surveyed senior finance and accounting professionals acknowledge that lease management, which is required to sustain accounting compliance, comes with real business benefits. But how do you identify – and benefit from – your lease information? 

  In our recent webinar, Lease Management: Unlocking ROI Opportunities within Your Lease Portfolio, experts in lease optimization and real estate shared: 

  • An overview of the lease management landscape
  • The impact of integrated lease management (reduced risk, reduced costs)
  • How to increase ROI from centralized lease data 

  

  Marc Betesh

  Founder & Executive Chairman
  Visual Lease

  

  Jason Aster

  Managing Director, Growth KBA Lease Services

  

  Tiffany Martin

  Real Estate Analyst Gartner

  To learn more, read the summary below or view the on-demand webinar. 

  Leases are incredibly expensive – and undermanaged by organizations

  Did you know that businesses often lack financial controls for their lease portfolio-related expenses, despite leases’ high cost and liability? This lack of control can put your organization at risk of losing a lot of time and money. 

  This is why lease management is important. Lease management enables you to: 

  • Reduce risk
    • Gain visibility into rights and obligations
    • Limit exposure to indemnification and other serious obligations
    • Control exposure to loss not covered by insurance required by the lease
    • Eliminate confusion and wasted time over repair and maintenance responsibility
    • Avoid damage to landlord-tenant relationship over misunderstood rights and obligations 
  • Reduce costs
    • Avoid overpayments by knowing what your leases say
      • Monitor OpEx, CAM, RE tax, utilities, sundry charges, supplemental services
    • Avoid missing the right to correct errors by managing audit windows
    • Take advantage of market opportunities by allowing cross-functional access to lease data
    • Secure proactive, effective and responsive use of your leased assets

  Lease management is two-fold

  A reliable lease management process consists of two things: 

  • Using dedicated technology to centralize and organize lease data 
    • Create a single source of truth by using a robust lease management system
  • Working with dedicated professionals to evaluate your lease portfolio 
    • Engage a third-party partner to guide or handle leases

  “It’s so important to have your leases organized. Having our leases all in one place has been a tremendous time-saver for us at Gartner,” said Tiffany Martin, Real Estate Analyst at Gartner. 

   

  For more information about lease management, view the on-demand webinar: Lease Management: Unlocking ROI Opportunities within Your Lease Portfolio. 

  The post Lease Management: Unlocking ROI Opportunities within Your Lease Portfolio first appeared on Visual Lease.]]> https://visuallease.com/2022-lease-market-analysis-lease-accounting-readiness-2/ Fri, 16 Sep 2022 17:20:37 +0000 https://visuallease.com/?p=7538

  

  On-demand webinar summary

  The latest report from The Visual Lease Data Institute (VLDI) features key findings and insights into market readiness for private companies and government entities. In our recent webinar, 2022 Lease Market Analysis: Lease Accounting Readiness, we dove into the latest insights from The VLDI Report, including: 

  • Common lease accounting challenges for private companies and the public sector market
  • Benefits of strong lease controls and accounting
  • How to leverage your lease data to make smarter, faster decisions

  

  Marc Betesh

  Founder & Executive Chairman
  Visual Lease

  

  Joe Fitzgerald

  SVP of Lease Market Strategy
  Visual Lease

  Read the summary below for a quick synopsis of the presentation, view the webinar on-demand, or view the report. 

  Common lease accounting challenges for private companies and the public sector

  Today, one-third (33%) of private companies are still not fully prepared to transition to ASC 842.

  And despite the GASB 87 effective date being six months earlier (June 15, 2021), an even larger portion of the public sector (44%) is not fully prepared to transition to GASB 87.

  Why? The reasons for delayed implementation and maintenance of the standards are due to:

  • Potential talent shortages & retention issues
    • Ninety-three percent (93%) of private companies say their team is already stretched thin, making the transition to compliance with ASC 842 even more overwhelming.
    • Similarly, (86%) of public sector entities say their team is already stretched thin, making the transition to compliance with GASB 87 even more overwhelming.
  • Demands of ongoing education
    • Knowledge maintenance was ranked as a top obstacle that private companies (33%) had to overcome throughout their lease accounting processes.
    • One-third (31%) of public sector entities ranked knowledge maintenance as a top obstacle they had to overcome throughout their lease accounting process.
  • Digital transformation challenges
    • Thirty percent (30%) of private companies reported adopting new technologies as a leading obstacle in their lease accounting projects.
    • Nearly forty percent (38%) of public sector entities cited challenges in adopting new technologies into the lease accounting process as a top concern.

  How to take control of your lease data

  The time commitment of gathering and managing lease data is another reason why organizations are not fully prepared for ASC 842 and/or GASB 87. It’s an incredibly large team effort that requires automation and cross-departmental team effort. In fact, private companies that are not using third-party software expect to spend 1,582 hours gathering all necessary lease information. 

  However, private companies who used third-party lease accounting software were able to save an average of 600 hours and public sector entities were able to save an average of 765 hours in this effort.  

  For more information about lease management, view the on-demand webinar: 2022 Lease Market Analysis: Lease Accounting Readiness.

  The post 2022 Lease Market Analysis: Lease Accounting Readiness first appeared on Visual Lease.]]> https://visuallease.com/asc-842-adoption-avoiding-the-pitfalls-2/ Thu, 08 Sep 2022 17:36:57 +0000 https://visuallease.com/?p=7521

  

  On-demand webinar summary

  How do you avoid the risks of improper ASC 842 adoption? Inaccurate lease accounting financials can result in a failed audit, additional fees and fines, so you need to ensure you do it right the first time.

  To do so, you’ll want to make sure you have a reliable and complete lease portfolio, lease data, system and processes. But this isn’t easy to accomplish, and many companies still struggle with ensuring their lease data is reliable.

  In our recent webinar, ASC 842 Adoption: Avoiding the Pitfalls, lease accounting experts from Visual Lease and Grant Thornton shared:

  • Answers to common lease accounting FAQs
  • How to circumvent common roadblocks during lease accounting adoption
  • Ways to avoid putting your business at risk and feel confident in your financial reports

  

  Joe Fitzgerald

  SVP of Lease Market Strategy
  Visual Lease

  

  Lisa Kaestle

  Director, Accounting Advisory Services
  Grant Thornton

  To learn more, read the summary below or view the on-demand webinar.

  Answers to Accounting, Operational and Software FAQs

  Did you know that today, nearly all private companies (98%) have started the transition to ASC 842, but one-third (33%) are still not fully prepared to transition to the new standard? This points to the massive pressure businesses are under as they attempt to retroactively learn and organize the details of their leases in advance of their initial reporting period under the new lease accounting standard.

  In this presentation, Lisa Kaestle of Grant Thornton answered some common FAQs related to the new lease accounting standard, such as:

  • Do I really have to gather all lease information, or can I estimate? Is there a materiality threshold?
  • What is an embedded lease? How do I know if I have an embedded lease?
  • What departments in my company will be affected? Can finance manage this transition alone? Who should be part of the team for this initiative?

  How to Mitigate Operational and Accounting Risks

  The new lease accounting standards open your business up to a much higher degree of scrutiny. There are major risks, including but not limited to:

  Operational Risks

  • Staff, workflow and system requirements and expenses
  • Lease review, approval and classification across the company
    • Database of record, lease administration and accounting
    • Lease data/process workflows/calculations/reporting
  • Lease data management across the company
  • Lease-buy decisions (short-term leases, fixed-versus-variable payments, lease incentives)

  Accounting Risks

  • Monitoring leasing activities
  • Accounting close cycle timeline and processes
  • Internal controls (systems, validation, lease portfolio changes, discount rates, lease re-assessment, disclosures)
  • Lease accounting calculations
  • Qualitative vs quantitative disclosures
  • Financial ratios and metrics (creditor and banking decisions)
  • Tax-to-book reconciliations
  • External and internal audits and reviews

  For more information about lease management, view the on-demand webinar: ASC 842 Adoption: Avoiding the Pitfalls.

  The post ASC 842 Adoption: Avoiding the Pitfalls first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-receives-industry-recognition-for-leading-lease-administration-and-lease-accounting-software-solutions/ Thu, 25 Aug 2022 13:47:48 +0000 https://visuallease.com/?p=7483 Organization included on The Inc. 5000 List for third consecutive year, also receiving a 2022 PropTech Breakthrough Award, 2022 SaaS Award and 2022 Stevie Award for Employer of the Year...
  The post Visual Lease Receives Industry Recognition for Leading Lease Administration and Lease Accounting Software Solutions first appeared on Visual Lease.]]>

  Organization included on The Inc. 5000 List for third consecutive year, also receiving a 2022 PropTech Breakthrough Award, 2022 SaaS Award and 2022 Stevie Award for Employer of the Year

  Woodbridge, N.J. – August 25, 2022 — Visual Lease, the #1 lease optimization software provider, today announced several high-profile recognitions that underscore its position as a unique and innovative financial technology solution provider and employer. Shortly after being the only software provider named a Leader in Lease Accounting and Lease Administration by G2, Visual Lease received a 2022 PropTech Breakthrough Award for Overall Lease Management Company of the Year and was also named a finalist by The 2022 SaaS Awards for the Best SaaS Product for Business Accounting or Finance.

  “There are solutions that specifically cater to initial compliance needs and then there’s Visual Lease,” said Visual Lease’s CEO, Robert Michlewicz. “We supply a unique and proven technology that combines the power of proper lease administration with precise lease accounting to empower easy and sustained compliance, while simultaneously enabling companies to minimize the risks and maximize the benefits associated with their lease portfolios. We’re honored to continue to receive recognition that highlights why more than 1,000 companies across the globe have partnered with Visual Lease.”

  Visual Lease was also included in the Inc. 5000 list of fastest-growing private companies in America for the third consecutive year, named among the top 100 fastest-growing private companies in New Jersey and the 259th fastest-growing private company in the New York City area.

  The organization also received a Silver Stevie Award for Great Employers in the Employer of the Year in the Computer Software category. Other leading organizations in this category included Lever, The Trade Desk, ValueLabs LLP and Rocket Software.

  “Our ability to continuously enhance our product and services is fueled by our best-in-class team,” said Pamela Cosmillo, Director of Human Resources at Visual Lease. “As we continue to advance in our journey as a remote-first company, we are dedicated to maintaining our strong and inclusive work environment through robust benefits, unique programs and a focus on career development and advancement across all of our departments.”

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  To learn more about open positions at Visual Lease, visit the Visual Lease Career Site.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

   

   

   

   

   

  The post Visual Lease Receives Industry Recognition for Leading Lease Administration and Lease Accounting Software Solutions first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-announces-amie-durr-as-svp-of-product/ Mon, 08 Aug 2022 14:02:20 +0000 https://visuallease.com/?p=7458 New CEO makes first strategic hire to empower organization to further expand its offerings Woodbridge, N.J. – August 8, 2022 — Visual Lease, the #1 lease optimization software provider, today...
  The post Visual Lease Announces Amie Durr as SVP of Product first appeared on Visual Lease.]]> New CEO makes first strategic hire to empower organization to further expand its offerings

  Woodbridge, N.J. – August 8, 2022 — Visual Lease, the #1 lease optimization software provider, today announced the appointment of Amie Durr as Senior Vice President of Product. In her role, Amie will lead and enable product innovation, ensuring that Visual Lease continues to support organizations’ evolving business needs by strengthening their lease accounting and administration processes while expanding its integration capabilities. This addition to Visual Lease’s executive team marks the first strategic leadership hire made by newly appointed CEO, Robert Michlewicz.

  “At Visual Lease, we are committed to providing organizations with the most comprehensive platform, expert services and robust partner community to master lease accounting compliance while achieving visibility, insights and expanded controls over their lease portfolios,” said Visual Lease’s CEO, Robert Michlewicz. “Amie has the experience, customer-first approach, passion and innovative outlook that will ensure we continue to deliver against our commitment, while simultaneously scaling with our growing customer base.”

  Prior to joining Visual Lease, Amie was the Vice President of Product Management at SparkPost, where she was responsible for products delivering nearly 40% of all commercial email. Her leadership in product innovation, strategic planning, team development and execution was integral to SparkPost’s success and ability to integrate into its customers’ complex environments. Amie’s contributions were a driving force behind MessageBird’s acquisition of SparkPost for $600M in 2021.

  “I am thrilled to join the Visual Lease team,” said Amie. “I believe tech companies should champion the voice of both the customer and the market, which is a big reason why I decided to join VL. This company does a tremendous job of helping organizations address today’s business needs while anticipating future demands. I look forward to working alongside Robert and the rest of the leadership team to further elevate the value that we are bringing to our customers and strategic partners.”

  This addition to Visual Lease’s leadership team comes on the heels of a strong second quarter for the organization, during which it achieved nearly 30% growth in annual recurring revenue and 40% growth in customer count, year-over-year.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  

  The post Visual Lease Announces Amie Durr as SVP of Product first appeared on Visual Lease.]]> https://visuallease.com/how-to-ensure-complete-and-accurate-lease-data-for-lease-accounting-compliance/ Sat, 06 Aug 2022 00:38:28 +0000 https://visuallease.com/?p=7456

  

  On-demand webinar summary

  Before the new lease accounting standards, many companies lacked visibility into their lease portfolio. This cost many businesses millions of dollars in overpaid rent, missed lease options and more.

  But now, leases are in the forefront as companies prepare for and maintain compliance with the new standards. However, many businesses struggle to ensure their lease data is comprehensive and up-to-date.

  In our recent webinar, How to Ensure Complete and Accurate Lease Data for Lease Accounting Compliance, experts shared best practice tips to ensure a thorough lease portfolio.

  

  Joe Fitzgerald

  SVP of Lease Market Strategy
  Visual Lease

  

  Rosemary Courtney

  Technical Accounting Director
  Visual Lease

  High-level key takeaways from the webinar include:

  • Common challenges and solutions for gathering and auditing lease data
  • Key advantages of using dedicated lease accounting technology

  To learn more, view the on-demand webinar or read the summary below.

  Common challenges and solutions when gathering and auditing lease data

   

  1. Ensuring a comprehensive lease portfolio is time-consuming 

  Many businesses have hundreds, if not thousands, of leases. To achieve and sustain lease accounting compliance, you need to have complete visibility into all your leases.

  However, gathering all your leases is time-consuming and laborious, and involves various departments.

  The sooner you begin, the better, to give your team enough time to identify and locate every lease across your business. If needed, you may want to hire third-party advisors experienced in lease accounting preparation to assist in this effort.

  2. Gathering lease data requires cross-departmental resources

  Because leases are typically scattered throughout various departments, you should identify all key stakeholders responsible for identifying leases up-front, including real estate, procurement, legal, IT and more.

  From there, this cross-functional team can work together to develop a reliable and sustainable process for data collection and maintenance to ensure your lease portfolio is complete and always up-to-date.

  3. Lease information is often not located in one location

  Prior to the new lease accounting standards, leases weren’t commonly tracked. And any leases that were tracked were likely inconsistent across the business.

  Once you’ve gathered all your leases for lease accounting compliance, it’s best to enter them in one single source of truth.

  A centralized lease portfolio enables you to track lease data in real time – and result in much faster, efficient lease accounting.

  4. Leases change often and must be maintained

  Maintaining compliance is a continuous effort, given leases’ dynamic nature. Staying compliant requires ongoing attention and a reliable process to identify and capture any financial changes to your lease portfolio.

  Without the right lease management software or tools, this can be extremely difficult to do.

  Robust technology, like Visual Lease, enables businesses to maintain one single source of truth for their lease portfolio and set internal controls for ongoing lease data maintenance, therefore supporting data integrity and accurate, up-to-date information.

  For more information, view the on-demand webinar, How to Ensure Complete and Accurate Lease Data for Lease Accounting Compliance.

  The post How to Ensure Complete and Accurate Lease Data for Lease Accounting Compliance first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-appoints-robert-michlewicz-as-ceo/ Mon, 01 Aug 2022 14:00:00 +0000 https://visuallease.com/?p=7424 Founder and current CEO, Marc Betesh, transitions to Executive Chairman as company continues to expand and evolve Woodbridge, NJ – August 1, 2022 — Visual Lease, the #1 lease optimization...
  The post Visual Lease Appoints Robert Michlewicz as CEO first appeared on Visual Lease.]]> Founder and current CEO, Marc Betesh, transitions to Executive Chairman as company continues to expand and evolve

  Woodbridge, NJ – August 1, 2022 — Visual Lease, the #1 lease optimization software provider, today announced that Robert Michlewicz has been named CEO. Marc Betesh, the founder and current CEO, will now serve as Executive Chairman. The transition in management structure will accelerate Visual Lease’s growth and ensure it remains the premier solution provider for lease accounting, administration and optimization.

  “Robert has demonstrated that he has the experience, insight and market knowledge to scale our business to new heights,” said Visual Lease’s founder and CEO, Marc Betesh. “I started Visual Lease in 1996 to provide an easy way for companies to have visibility into their leases, because I saw firsthand how even the slightest misstep in managing a lease can disrupt operations and cost millions.  The lack of controls around the second-largest expense always baffled me. Now that the new lease accounting standards have brought leases onto the balance sheet, they are under intense scrutiny by finance and accounting departments everywhere.  I am thrilled to pass the torch to a leader that has extensive experience in the financial accounting software space. Robert will help us innovate, expand and grow our offering to provide even more value to our customers.”

  New accounting standards and complex business priorities, including inflation, talent shortages and the ongoing struggle to adjust in a newly post-pandemic world have brought lease management and accounting to the forefront for businesses, but there is still much to accomplish in the space. According to the most recent report from The Visual Lease Data Institute, The 2022 Lease Market Analysis: Lease Accounting Readiness, despite leases typically making up a large portion of an organization’s budget, nearly three-quarters (71%) of private companies cannot say with confidence how much their leases cost their business.

  “It’s an exciting time to be at Visual Lease, which was recently recognized as the market leader for both lease administration and accounting software,” said Robert Michlewicz. “I am energized to expand Visual Lease’s value to our global customers by empowering them in meeting their needs within the office of finance while optimizing the operational effectiveness of their lease portfolios.”

  Michlewicz, who recently joined Visual Lease as President, has more than two decades of experience in the financial technology sector, driving operational excellence in several high-growth companies. Most recently, he was Chief Strategy Officer at Trintech, a leading provider of global Financial Corporate Performance Management (FCPM) software. During his nearly 11 years there, the company maintained double-digital annual recurring revenue (ARR) growth, year-over-year. Prior to Trintech, Michlewicz was the Regional President for Bowne & Co. (former NYSE), the largest global disclosure management firm and was President of Chas. P. Young Co., where his company played a vital role in newly expanded SEC regulatory compliance reporting.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contact

  Karen Lee
  Caliber Public Relations
  T+1 929 269 4436
  karen@calibercorporateadvisers.com

  

  The post Visual Lease Appoints Robert Michlewicz as CEO first appeared on Visual Lease.]]> https://www.accountingtoday.com/news/companies-unsure-of-leasing-costs-and-accounting-transition#new_tab Fri, 29 Jul 2022 13:00:51 +0000 https://visuallease.com/?p=7421 Even though leases typically comprise a major piece of a business’ budget, most companies don’t know how much their leases cost and many are unsure about how to account for...
  The post Article: Companies unsure of leasing costs and accounting transition first appeared on Visual Lease.]]> Even though leases typically comprise a major piece of a business’ budget, most companies don’t know how much their leases cost and many are unsure about how to account for them under the new rules.
  The post Article: Companies unsure of leasing costs and accounting transition first appeared on Visual Lease.]]> https://cfo.cmail19.com/t/ViewEmail/d/D63765BC8CA965DF2540EF23F30FEDED/51D8093FFAF79A3D3FEC1D8A50AFD3BD?alternativeLink=False#new_tab Fri, 29 Jul 2022 13:00:43 +0000 https://visuallease.com/?p=7420 The new lease accounting standards under ASC 842 are sticky, demanding, and—after multiple delays—most definitely here for all companies, whether public or private when the Financial Accounting Standards Board finally...
  The post Article: Wall Street Journal’s CFO Journal Newsletter (7/26) first appeared on Visual Lease.]]> The new lease accounting standards under ASC 842 are sticky, demanding, and—after multiple delays—most definitely here for all companies, whether public or private when the Financial Accounting Standards Board finally said no more extensions, as Accounting Today reported in November 2021.
  The post Article: Wall Street Journal’s CFO Journal Newsletter (7/26) first appeared on Visual Lease.]]> https://www.globest.com/2022/07/26/many-still-arent-ready-for-the-new-lease-accounting-rules/?kw=Many%20Still%20Aren%27t%20Ready%20for%20the%20New%20Lease%20Accounting%20Rules&et=editorial&bu=REM&cn=20220726&src=EMC-Email&pt=NewYork&slreturn=20220627163259#new_tab Fri, 29 Jul 2022 13:00:09 +0000 https://visuallease.com/?p=7422 The new lease accounting standards under ASC 842 are sticky, demanding, and—after multiple delays—most definitely here for all companies, whether public or private when the Financial Accounting Standards Board finally...
  The post Article: Many Still Aren’t Ready for the New Lease Accounting Rules first appeared on Visual Lease.]]> The new lease accounting standards under ASC 842 are sticky, demanding, and—after multiple delays—most definitely here for all companies, whether public or private when the Financial Accounting Standards Board finally said no more extensions, as Accounting Today reported in November 2021.
  The post Article: Many Still Aren’t Ready for the New Lease Accounting Rules first appeared on Visual Lease.]]> https://visuallease.com/the-visual-lease-data-institute-finds-71-of-private-organizations-are-unsure-how-much-their-leases-cost/ Mon, 25 Jul 2022 13:06:26 +0000 https://visuallease.com/?p=7416 Private companies and government entities continue to face challenges around properly managing and reporting their leases in accordance with the new lease accounting standards Woodbridge, N.J. – July 25, 2022...
  The post The Visual Lease Data Institute Finds 71% Of Private Organizations Are Unsure How Much Their Leases Cost first appeared on Visual Lease.]]>

  Private companies and government entities continue to face challenges around properly managing and reporting their leases in accordance with the new lease accounting standards

  Woodbridge, N.J. – July 25, 2022 — Visual Lease, the #1 lease optimization software provider, today unveiled its newest report from The Visual Lease Data Institute, The 2022 Lease Market Analysis: Lease Accounting Readiness. The study found that despite leases typically making up a large portion of an organization’s budget, nearly three-quarters (71%) of private companies are not entirely confident they know how much their leases cost their business. This lack of awareness and visibility is one reason companies are slow to transition to the new lease accounting standards. Notably, a third (33%) of private companies are still not fully prepared to transition to ASC 842, which is effective for all 2022 and 2023 financial statements and beyond.

  Despite the GASB 87 effective date being six months earlier (June 15, 2021), a delay appears to be emerging in the implementation of the standard. Forty-four percent of the government market is not fully prepared to transition to GASB 87 and only 18% of government institutions are at a point where they are considering lease accounting maintenance beyond initial compliance. In addition, nearly one-fourth of government entities are not aware of GASB 96, a looming standard that will impact how governmental organizations report on their Subscription-Based Information Technology Agreements (SBITAs) for fiscal years beginning after June 15, 2022.

  “For years, companies may have been able to get away with loosely managing and tracking their leases, but that is no longer the case with new lease accounting standards, which require leased assets to be reflected on the balance sheet,” said Visual Lease’s founder and CEO, Marc Betesh. “In addition to these new standards, the global economic climate is creating additional concerns around implementing proper internal controls and lease management processes.”

  Workforce shortages and retention issues are also contributing to private companies and government entities delaying their transition to the new standards. A staggering 93% of private companies and 86% of government organizations say their teams are already stretched thin, making lease accounting even more overwhelming. And nearly 40% of private companies report that avoiding employee burnout is a top concern associated with maintaining proper control over their lease portfolio.

  “The silver lining is that the new standards are providing companies with the opportunity to prioritize lease management to not only achieve lease accounting compliance, but also, to make stronger business decisions and better manage risk,” added Betesh.

  Risks associated with not implementing a proper lease management strategy include:

  • • An unnecessarily complex lease accounting process that relies on manual efforts.
    • A failed annual audit due to incomplete and inaccurate lease data, potentially resulting in increased fees, damaged credibility and diminished credit.
    • The inability to pivot and address new business needs due to a lack of visibility into important lease details.

  By implementing a centralized system of record, private companies and government entities have been able to recognize a range of benefits, including automation, reduction of risk, more cost-saving opportunities and a new level of customer service and support. Because of these many advantages, private companies were able to save an average of 600 hours and government entities were able to save an average of 765 hours by using third-party lease accounting software.

  To compile the findings in the report, Visual Lease surveyed 200 senior finance and accounting professionals at companies with more than 1,000 employees and 100 U.S. financial management professionals at local, state and federal governmental organizations. Within the research, industry leaders from Visual Lease and other organizations such as RSM, On Q Financial and Indeed, break down common challenges and roadblocks experienced by the private and government markets; how organizations can leverage lease accounting to make faster, smarter decisions; and best practices for accelerating and maintaining lease accounting compliance, while preparing for new guidance, such as GASB 96.

  For additional insights, visit The Visual Lease Data Institute.

  To access insights on lease accounting and strategic lease portfolio management, subscribe to The Visual Lease Data Institute Podcast.

  About The Visual Lease Data Institute

  The Visual Lease Data Institute is a collection of market-leading data, trends and insights on lease accounting, management and optimization created and curated by Visual Lease, provider of the #1 lease optimization software. The Institute was founded on 35 years’ experience managing lease data and financials and was created to arm organizations with the knowledge required to achieve and maintain lease accounting compliance and leverage their leases as strategic business assets.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contact:

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post The Visual Lease Data Institute Finds 71% Of Private Organizations Are Unsure How Much Their Leases Cost first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-announces-strong-second-quarter-results/ Wed, 20 Jul 2022 15:20:22 +0000 https://visuallease.com/?p=7229 The only software provider recognized as a Leader by G2 in Lease Administration and Lease Accounting continues to achieve double-digit annual recurring revenue, customer and employee growth YoY Woodbridge, NJ...
  The post Visual Lease Announces Strong Second Quarter Results first appeared on Visual Lease.]]>

  The only software provider recognized as a Leader by G2 in Lease Administration and Lease Accounting continues to achieve double-digit annual recurring revenue, customer and employee growth YoY

  Woodbridge, NJ – July 20, 2022 — Visual Lease, the #1 lease optimization software provider, today announced strong second quarter results, achieving nearly 30% growth in annual recurring revenue and 40% growth in customer count, year-over-year. Visual Lease is currently used by more than 1,000 organizations to achieve and sustain compliance with FASB, IFRS and GASB lease accounting standards, and simultaneously improve the financial, legal and operational performance of their leases.

  “Now more than ever before, organizations of all industries must pay very close attention to their leases,” said Visual Lease President, Robert Michlewicz. “If companies fail to gain control and visibility across their lease portfolios, they could lose significant time, money and credibility – a risk no business is willing to take in today’s climate. The reason that Visual Lease continues to be the partner of choice for private and public companies, as well as government entities, is because our software and services are grounded in 25+ years of experience helping organizations manage, track and report on their leases. As we move into the second half of the year, we’re continuing to make investments to serve our growing community of customers and team members.”

  In Q2 2022, Visual Lease:

  Software & Services

  • Recognized as the only software provider that is a Leader in both the Lease Accounting and Lease Administration categories by G2.
  • Improved the performance of major Lease Accounting reports.
  • Named a winner of a Bronze Stevie® Award in the Customer Service Department of the Year category in The 20th Annual American Business Awards.

  Talent

  • Appointed fin-tech veteran, Robert Michlewicz, as President to oversee the company’s Corporate Strategy, Product, Engineering, Marketing, Sales and Customer Service functions.
  • Named a Best Place to Work in New Jersey by NJBIZ for the third consecutive year.
  • Expanded its Customer Services, Product and Engineering teams in kind with its growing base of customers to ensure that the company continues to drive innovation and provide a customer experience second to none in the category.

  Alliance Partners

  • Expanded its Alliance Partner program by welcoming Blue Sky Capital Strategies, LLC, Embark With Us, Barre & Company LLC and Brady Ware & Company to its network.
  • Announced Grant Thornton will co-present two upcoming ASC 842 Educational Webinar sessions alongside its own lease accounting experts on July 26th and August 24th.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease
  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Visual Lease Announces Strong Second Quarter Results first appeared on Visual Lease.]]> https://visuallease.com/lease-management-the-key-to-successful-lease-accounting/ Wed, 06 Jul 2022 14:48:32 +0000 https://visuallease.com/?p=7213 Written by: Robert Michlewicz, President at Visual Lease I was drawn to Visual Lease for several reasons, one of the biggest is how the company is leading the market in...
  The post Lease Management: The Key to Successful Lease Accounting first appeared on Visual Lease.]]>

  Written by: Robert Michlewicz, President at Visual Lease

  I was drawn to Visual Lease for several reasons, one of the biggest is how the company is leading the market in addressing big areas of exposure and risk for public, private companies and government entities.

  What exactly do I mean by that?

  I’m proud to say that in June, Visual Lease was the only software provider named a Leader in both Lease Accounting and Lease Administration categories by G2.

  Keeping in mind that this recognition is solely based on customer feedback, it is a direct reflection of the decades of work and expertise behind our software and services.

  Visual Lease has been around for 25+ years, and was first developed as a world-class lease management solution, serving the real estate departments of some of the largest U.S. corporations. Anticipating the introduction of the new lease accounting standards, the company expanded the platform in 2018 to include robust lease accounting capabilities. Today, we help 1,000+ organizations get compliant, stay audit-ready all year long, take advantage of cost-savings opportunities and make better-informed operational decisions.

  A reason I was drawn to Visual Lease is the same reason it’s been recognized by G2 (and a few others like Capterra, Deloitte, Inc.). As a business, we know the risks associated with complying with the new lease accounting standards without first implementing a proper lease management strategy. Further, we’ve seen time and time again just how valuable it can be for an organization to have accurate and complete lease data. We’ve built our platform on these insights, and our efforts are backed by some of the most experienced and well-informed experts in the industry.

  But please, don’t take my word for it…. check out what our customers had to say when asked what they like best about Visual Lease:

  • “Visual Lease streamlines our accounting for leases and completely replaces our existing Excel solution (for both GAAP and IFRS).” – Adam B.
    ‌
  • “I like being able to view the details for all of our various leases in one place. It’s nice to have a one-stop shop that everyone (who needs the details) can access.” – User in Consumer Goods
    ‌
  • “The simplicity of asset management is the best part of VL. It is very scalable lease accounting and management software. You can solve major lease accounting challenges with automated calculations and full integrations.” – Internal Consultant in Information Technology & Services
    ‌
  • “Visual Lease gets the job done. The thing I like the most is that it does what we need it to do. It meets all of our needs from ASC 842 implementations, to rent payments, to tracking renewals, it does it all. Multiple departments use Visual Lease, and it does a good job at meeting our collective needs.” – Administrator in Healthcare
    ‌
  • “I have used Visual Lease with two different companies now, and both times they have been positive experiences. I have managed a smaller lease portfolio of 30-50 leases. While I don’t utilize all of the tools that are available within Visual Lease, the tools themselves are well thought out. I recently completed our first year-end audit after implementing the ASC 842 lease standard, and the Standard Lease Reports were simple to pull and provide to our audit team. Visual Lease is well aware that there is a learning curve with using their software, so they have a comprehensive training website called ‘VL University’ that has on-demand training videos that will walk you through the features of the website. There is also a User Guide that I can review to learn how every feature works within the website. I have also had my service tickets replied to within 24 hours of submitting them. I think Visual Lease cares about its customers and is an excellent partner for managing leases.” – Assistant Controller in Manufacturing
    ‌
  • “I like the alerts that help you know in advance when the lease terms are slated to change. Also, it is easy to add people to a distro list for alerts.” – User in Retail‌

  This recognition is exciting, and a testament to not only where we’ve been, but also, where we’re headed. After just one month of working with our amazing team and customers, I am even more encouraged, energized and inspired to be a part of Visual Lease.

  I’ll leave with two parting thoughts:

  1. First and foremost, thank you and congratulations to the entire team at VL for your relentless commitment to our customers.
     ‌
  2. And to my network, if you’re interested in learning more about why lease management is so critical to your business, visit this page.

   

  The post Lease Management: The Key to Successful Lease Accounting first appeared on Visual Lease.]]> https://visuallease.com/the-impact-of-fasabs-2022-proposed-lease-accounting-reporting-changes/ Wed, 06 Jul 2022 13:22:28 +0000 https://visuallease.com/?p=7218 Have you ever wondered how the public can participate in the development of accounting standards? Do you have opinions you would like to share? Many accounting standards governing bodies, such...
  The post The Impact of FASAB’s 2022 Proposed Lease Accounting Reporting Changes first appeared on Visual Lease.]]>

  Have you ever wondered how the public can participate in the development of accounting standards? Do you have opinions you would like to share? Many accounting standards governing bodies, such as the Federal Accounting Standards Advisory Board (FASAB or the “Board”), provide some opportunities to do just that.

  Why Exposure Drafts? 

  Whenever an accounting governing body considers new standards, or changes to existing standards, they release exposure drafts for public comment. The FASAB’s exposure drafts, which affect hundreds of federal agencies and the associated public, are posted publicly for commentary. You can find these exposure drafts and the template to submit comments on their website. The FASAB usually offers between 45 and 90 days to submit comments. Visual Lease contributes opinions to many standards, including these recently proposed changes. 

  The Board considers these comments when deciding whether to move forward with the proposed changes. If interested, you can access the FASAB’s list of active projects and drill into any associated drafts on the FASAB website.

  Anyone can submit comments, and the FASAB appreciates all views but particularly looks for comments that include the reasoning behind an opinion (pdf). The Board also appreciates it when the reasoning/concerns include the expected benefits and/or perceived costs of implementing a proposal.

  2022 FASAB proposed lease disclosure and reporting changes

  As a lease administration and accounting platform, Visual Lease proactively tracks FASAB projects that impact lease reporting and meeting the standards. An exposure draft to provide clarification and amend SSFAS 54, Leases and SSFAS 60 Omnibus Amendments 2021, was published May 9, 2022 with a comment period that ends Jul 8, 2022. The background includes:

  • In November 2021, SFFAS 60 was published
  • SFFAS 60 did not address all concerns related to leases and the implementation of the SFFAS 54 and other standards
  • Clarification was needed relating to the discount rate for lease liabilities and receivables
  • Clarification was needed to add intragovernmental sale-leasebacks and disclosure requirements in specific paragraphs and footnotes
  • This proposal would amend SFFAS 54 paragraphs 42, 47, 48 and 59, and add new paragraphs 42 A-C and 59 A-C
  • The effective date for the proposed changes is for reporting periods beginning after September 30, 2023

  Below is a summary of Visual Lease’s response to this FASAB exposure draft: 

  Discounting lease liabilities and receivables 

  For leases without a stated interest rate, originally paragraph 42 of SFFAS 54 and the issued amendment in SFFAS 60, par. 19, required lessees to use the discounted rate from the “lessee’s estimated incremental borrowing rate.” This proposal would require the lessee to use an interest rate “based on marketable Treasury securities with similar maturity to the end of the lease term.”

  The added paragraphs 42B and 59B allow for rounding up or down when selecting a marketable Treasury rate term as follows:

  “[…] round down to the nearest maturity term with a published rate, interpolate the rate for the period between two published rates, or round up to the nearest maturity term with a published rate. The methodology for selecting marketable Treasury rate terms and related rates, interpolating, and/or rounding up or down should be consistent from period to period.”

  The added paragraphs 42C and 59C clarify what to do if the lease goes beyond the longest-published Treasury security term. In this case, the entity should select the longest-published Treasury security term rate.

  Using rates based on marketable Treasury securities would help reduce complexity and inconsistencies versus using the estimated incremental borrowing rate. It may also reduce the cost of determining the incremental borrowing rate, which can be costly to ascertain per our experience with private clients adopting the ASC 842 standard. Although we believe using rates based on marketable Treasury securities would make it easier to meet compliance requirements, we also recognize that it may, in certain circumstances, overstate or understate asset values.

  We also believe paragraphs 42A (lessee) and 59A (lessor) may need clarification. Under the proposed amendments, the reporting agency has two options to determine its rate. The rate can be either based on a recent Treasury rate or historical average rate if the Treasury security has a similar maturity as the lease term “on the date of initial liability recognition (or the date the liability is updated).” If it is meant that to approximate a rate if a date-specific rate is not available, we believe that in today’s internet environment, detailed historical information is easily available so there likely would not be a need for this.

  Intragovernmental sale-leasebacks disclosure requirements

  This proposal also amends SFFAS 54 footnote 11 to paragraph 89 and paragraph 92. The purpose of the amendment clarifies that intragovernmental sale leasebacks are included and must follow the lessee and lessor requirements. Added are references to SFFAS 7 paragraphs 314-315 (intragovernmental) in footnote 11 and the reference to SFFAS 54 paragraphs 37-38 to paragraph 92.

  What are your thoughts on these changes?  

  Although we think these suggested changes should add consistency and reduce the complexity of meeting compliance, while avoiding costly estimations of the incremental borrowing rate, we also believe it may overstate or understate the value of some assets. What is your opinion?

  FASAB’s Questions & Visual Lease’s Responses

  QFR* 1 

  Do you agree or disagree with the proposed amendments to address discounting lease liabilities and receivables, as reflected in paragraphs 3-7 (amending par. 42, 47-48, and 59 of SFFAS 54), and the Board’s basis for such proposals? Please provide the rationale for your answer.

  AFR* 1

  Visual Lease, LLC supports the proposed amendments to address discounting lease liabilities and receivables. SFFAS 54’s requirement to use an explicit rate is unchanged; if no explicit rate is stated, an equivalent risk-free rate is expected to be utilized.  The terminology provided in the proposed amendments is “based on marketable Treasury securities with similar maturity to the end of the lease term,” in essence the definition of a risk-free rate.

  Visual Lease, LLC has observed that in the current private sector implementation of ASC 842, Leases, the new lease accounting standard issued by the Financial Accounting Standards Board (FASB), the use of a risk-free rate rather than a higher incremental borrowing rate (IBR) may have resulted in higher liability values (and therefore asset values) on organizations’ financial position. Additionally, Visual Lease, LLC has observed that this effect could trigger debt service covenants and otherwise cause inconsistency in analytical comparability. However, Visual Lease, LLC believes that, while organizations may have to caveat their financing reporting requirements to lenders to highlight these factors in that QFR 1 may result in less accurate and consistent valuation of liabilities, the suggested methodology does reduce complexity and provides user prescriptiveness in ease of use and availability of input data, thereby facilitating compliance.

  Additionally, Visual Lease, LLC observes two impacts regarding the valuation of the lease liabilities and assets in practice: the applicability and accuracy of a specific rate to the entity in question, and the timeliness of the application of that rate. Namely:

  • The discount rate applied could result in less accurate valuations if the entity has a higher cost of borrowing than the federal government rate.
  • Private-sector administration of ASC 842, Leases, has shown that reassessments of incremental borrowing costs can be costly to ascertain and therefore are not necessarily “kept current”.  In a stable interest rate environment that is not a significant matter, but in an evolving rate environment (such as 2022 is turning out to be), lack of updates can result in more frequent and severe errors that may not consider or sufficiently identify entity-specific risk.

  Visual Lease, LLC notes that the original wording in SFFAS 54 authorizing entities to use rates based on their own borrowing authority is expressly deleted in this exposure draft, removing calculations from actual costs, and resulting in less accurate valuations. Given the transparency of the Treasury Securities market and rate, and its availability to those entities subject to the FASAB (Federal Accounting Standards Advisory Board) standards, Visual Lease, LLC believes that the suggested changes enhance the process of calculation and result in an” always having up to date information available” situation when creating new or remeasurement calculations for lease accounting.  Therefore, Visual Lease, LLC supports the use of risk-free rates.

  Additionally, and as a practical matter regarding application of the risk-free rate, the revised guidance allows rounding up or rounding down to the nearest maturity date, or to interpolate between two dates.  Extrapolating from the longest term (30 years) would not be permitted.  Paragraph 42A references “historical average rates” and appears broad in context and may require further clarification.  If it is meant that to approximate a rate if a date-specific rate is not available, we believe that in today’s internet environment, detailed historical information is easily available so there likely would not be need for this.

  QFR 2

  Do you agree or disagree with the proposed amendments to clarify the applicability of paragraphs 89-92 of SFFAS 54 to intragovernmental sale-leasebacks and the disclosure requirements applicable to them, as reflected in paragraphs 8-9, and the Board’s basis for such proposals? Please provide the rationale for your answer.

  AFR 2

  Initially, SFFAS 54 was silent regarding sale-leaseback transactions intragovernmental in nature.   Visual Lease, LLC agrees with the proposed amendments to clarify the applicability of paragraphs 89-92 of SFFAS 54 to intragovernmental sale-leasebacks and the disclosure requirements applicable to them, as reflected in paragraphs 8-9, and the Board’s basis for such proposals as it clarifies the requirements apply both to public sale-leasebacks and intragovernmental sale-leasebacks for disclosure purpose.  Visual Lease, LLC supports this provision because, while not prescribing accounting treatment, it does add clarity and transparency to the amount of intragovernmental sale-leaseback for each reporting entity through disclosure.

  As a result of our analysis, Visual Lease, LLC is supportive of both clarifications provided in this exposure draft.

  * QFR = Questions for Respondents

  *AFR = Answer from Respondents

  The post The Impact of FASAB’s 2022 Proposed Lease Accounting Reporting Changes first appeared on Visual Lease.]]> https://visuallease.com/the-cross-functional-power-of-centralized-lease-data/ Thu, 30 Jun 2022 19:14:48 +0000 https://visuallease.com/?p=7205

  

  On-demand webinar summary

  Having accurate, reliable lease data is a necessary part of achieving lease accounting compliance. But beyond lease accounting, having visibility into lease data also supports businesses manage lease-related expenses and avoid potential overpayment.

  In our recent webinar, The cross-functional power of centralized lease data, lease accounting experts (Joe Fitzgerald, SVP of Lease Market Strategy at Visual Lease, Zachary Forrest, Executive Director at Jackson Cross Partners, and Lou Battagliese, SIOR and Founding Partner at Jackson Cross Partners), covered how centralized lease data can unlock cross-functional business opportunities.

  

  Joe Fitzgerald

  SVP of Lease Market Strategy

  Visual Lease

  

  Zachary Forrest

  Executive Director

  Jackson Cross Partners

  

  Lou Battagliese

  SIOR and Founding Partner

  Jackson Cross Partners

  About Visual Lease

  Visual Lease makes easy-to-use software to help organizations manage and account for their leases, and stay compliant with US-GAAP, IFRS and GASB lease accounting standards.

  About Jackson Cross Partners

  Jackson Cross Partners is a full-service corporate real estate company, providing services to support companies in every stage of their real estate maturity.

  Here are some key takeaways from the webinar:

  Today, businesses have more visibility into their leases

  The new lease accounting standards require businesses to pay closer attention to their leases. To comply, they have developed cross-departmental processes to identify and keep track of each lease within their portfolio.

  “It’s really important to be able to know what your rights and obligations are within your lease portfolio. Do you have an option to renew a contract or expand? Is there a termination option? If you’re forced to read leases while doing this analysis, you’re going to be behind the curve.” – Lou Battagliese, SIOR & Founding Partner, Jackson Cross Partners

  Centralizing lease data in one location is an effective way to ensure each lease is represented – and provides businesses with a useful view of their leases. In turn, businesses can use this data to make better informed decisions, saving them time and money that may be otherwise left on the table.

  How did we get here?

  When businesses began preparing for the new lease accounting standards, they quickly realized how time-consuming it was to gather leases. It required accounting teams to work cross-functionally with departments such as legal, real estate, procurement and human resources. However, as the transition date loomed, accounting teams panicked and took over the project.

  “It became a phase one project just to get the lease accounting in. Some companies also found alternative solutions and now these companies have multiple systems of truth [for their leases].” – Lou Battagliese, SIOR & Founding Partner, Jackson Cross Partners

  Then, once the pandemic hit, businesses were forced to adapt to hybrid or work-from-home arrangements, which created even more challenges for how cross-departmental teams worked together to gather and organize lease data.

  The ongoing effects of the pandemic also impacted office space utilization, industrial supply chain demands and retail storefront footprints. Now more than ever, businesses rely on having their lease data in a centralized location, so they can make better, more informed decisions about their leases.

  How centralized lease data impacts businesses

  Having centralized lease data enables your business to easily lean into lease terms and uncover opportunities to potentially reduce lease costs.

  Lease data is incredibly powerful to use within:

  • • Cross-functional workflows that encourage collaboration
    • Operational efficiencies with complete and accurate lease data
    • Timely, strategic decisions to efficiently react to economic changes
    • Cost-saving opportunities with Day 2 and beyond

  To learn how to empower your business with centralized lease data, view our on-demand webinar: The cross-functional power of centralized lease data.

  Visual Lease and Jackson Cross Partners provide a full end-to-end solution for ASC 842, IFRS 16, GASB 87 and GASB 96. Click here to download our one-pager for more information.

  The post The cross-functional power of centralized lease data first appeared on Visual Lease.]]> https://visuallease.com/how-to-conduct-a-lease-inventory/ Tue, 28 Jun 2022 17:09:12 +0000 https://visuallease.com/?p=7198 Do you know where all your leases are? If you don’t, chances are you haven’t conducted a lease inventory for your business. Conducting a lease inventory is a standard practice...
  The post What are the three main steps in effectively conducting your lease inventory? first appeared on Visual Lease.]]>

  Do you know where all your leases are? If you don’t, chances are you haven’t conducted a lease inventory for your business. Conducting a lease inventory is a standard practice in lease accounting and a very important step in achieving ASC 842 compliance. This process involves finding all your lease data from various departments, which is often a time-consuming cross-functional effort.  

  What is considered a lease under ASC 842? FASB defines a lease as “a contract or an element of a contract that conveys the right-of-use (ROU) of a physically distinct identified asset for a specified period of time in exchange for payment.” This includes embedded leases which are typically leases that are part of larger contracts. These contracts need to be identified and accounted for on the balance sheet in order to achieve compliance.  

  However, there is an exemption for short-term leases. These contracts have a lease term of 12 months or less and will not appear on the balance sheet. Additionally, they do not include options to purchase the asset from the lessor.  

  When it comes time for your audit, auditors want thorough, reliable and accurate data to examine. Completeness is key here, meaning that you’ve properly captured and identified all lease arrangements to be included in your calculations (including embedded leases). This will always be one of the items auditors test, which is why it’s important to conduct a thorough lease inventory.  

  In this blog, we will share three essential tips to ensure you conduct a thorough lease inventory to support accurate lease accounting. By taking these steps, you will set your business up for lease accounting success and feel confident that you have every lease represented in your lease portfolio.  

  1. Engage stakeholders from cross-functional departments 

  To begin the process of conducting a lease inventory, you’ll need to identify what departments have lease contracts. Under ASC 842, leases can range anywhere from property, plant, equipment and even IT assets. Typically, we’ll see Real Estate and Legal departments heavily involved in leases, but there are also departments like IT that have unique lease contracts.  

  Below are 5 recommended departments you should engage with and the types of leases they most likely handle.    

  • Accounting/Finance
    • This department is a great starting point for conducting a lease inventory as they are the gatekeepers of the prior year’s lease information.
  • Real Estate
    • The real estate department naturally handles all real estate and property leases, which may include things like office buildings and commercial real estate.
  • Procurement
    • The procurement department handles all non-real estate leases which can range from vehicles, equipment, furniture and even fixtures.
  • Legal
    • The legal department reviews all lease arrangements and is a great source of detailed information for embedded leases.
  • IT
    • This department handles all IT procurement and procures IT assets. This can range anywhere from computers, networks and servers.

  2. Organize your leases in one location 

  Once you’ve gathered all your leases, it’s important to centralize them in one location. The most effective way to do this is by utilizing lease accounting technology. This will allow your cross-functional team to work under the same system and have a comprehensive audit trail for all lease changes. It will also help your team analyze lease data more thoroughly – which can help reduce the risk of overpaying for leases and ultimately help your business save money.  

  3. Thoroughly check for accuracy and completeness 

  As your business prepares for ASC 842 compliance, it’s important to examine (and re-examine) your lease contracts thoroughly for accuracy and completeness. Auditors will want to make sure that all transactions have been recorded properly on the balance sheet. It never hurts to double and triple check your work.  

  In fact, make sure you’ve also cross-referenced all lease contracts with the Accounts Payable department. You could be paying bills for other leases from other departments, which can lead to misreporting.  

  The outlined steps above should help your business create a smooth process in conducting a lease inventory. Remember, the more accurate your lease portfolio is, the better chance you’ll have in successfully achieving ASC 842 compliance. It will also help significantly decrease the risks of misreporting lease data, which can result in fines, increased audit fees and potential legal action. That’s why conducting a thorough lease inventory is not only important but can also be highly beneficial for your business. Successful lease accounting isn’t just compliance, it’s saving money and creating opportunities to improve business operations, and that all begins with your lease inventory.   

  The post What are the three main steps in effectively conducting your lease inventory? first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-grant-thornton-to-co-present-asc-842-educational-webinar-series/ Tue, 14 Jun 2022 13:30:34 +0000 https://visuallease.com/?p=7141 Technical accounting expert from leading independent audit, tax and advisory firm will join the VL team to share exclusive insights on lease accounting compliance Woodbridge, NJ – June 14, 2022...
  The post Visual Lease & Grant Thornton to Co-Present ASC 842 Educational Webinar Series first appeared on Visual Lease.]]>

  Technical accounting expert from leading independent audit, tax and advisory firm will join
  the VL team to share exclusive insights on lease accounting compliance

  Woodbridge, NJ – June 14, 2022 — Visual Lease, the #1 lease optimization software provider, today announced that Lisa Kaestle, Director, Accounting Advisory Services at Grant Thornton, will join its lease accounting experts to co-present two upcoming ASC 842 Planning Sessions. These monthly, virtual events, which Visual Lease has offered since 2021, are designed to help public and private companies understand how to easily achieve and sustain compliance with lease accounting standard ASC 842.

  “We are committed to being more than just a technology solution,” said Visual Lease’s founder and CEO, Marc Betesh. “In addition to continuously elevating our software’s capabilities, we are always working to expand our Alliance Partner network to bring increased value to our shared customers. Simultaneously, we offer a regular cadence of complementary, virtual events to provide public and private companies, as well as government entities with the intel they need to master lease accounting compliance. In welcoming Grant Thornton to co-present our upcoming ASC 842 Planning Sessions, we’re merging insights of our Alliance Partner network with our in-house experts to deliver a new level of knowledge-sharing.”

  Visual Lease’s monthly ASC 842 Planning Sessions provide attendees with expert tips and industry best practices to accelerate and maintain compliance with ASC 842. Visual Lease and Grant Thornton have partnered together for over 5 years, working to help their shared customers achieve confident lease accounting compliance. To support this ongoing effort, Kaestle will join Joe Fitzgerald, SVP of Lease Market Strategy at Visual Lease, and Matthew Watson, Director of Implementation Services at Visual Lease, for the next two sessions: July 26th and August 24th.

  “I’m looking forward to co-presenting these upcoming sessions with the Visual Lease team,” said Kaestle. “At Grant Thornton, we have a very similar mission, which is to help businesses across all industries make stronger financial decisions. Today, many companies do not yet realize how much risk and opportunity are associated with their leases – and that’s just one of the important points we’ll cover in the ASC 842 Planning Sessions.”

  For additional details, registration information and updates on opportunities to earn CPE credits, please visit Visual Lease’s events page.

  For information on how to work with the Visual Lease and Grant Thornton teams, visit the partnership page.

  About Grant Thornton LLP

  Grant Thornton LLP (Grant Thornton) is one of America’s largest audit, tax and advisory firms — and the U.S. member firm of the Grant Thornton International Ltd global network. We go beyond the expected to make business more personal and build trust into every result. With revenues of $1.97 billion and 51 offices nationwide, Grant Thornton is a community of more than 9,000 problem solvers who value relationships and are ready to help public and private organizations of all sizes and industries create more confident futures. Because, for us, how we serve matters as much as what we do.

  “Grant Thornton” refers to Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. Services are delivered by the member firms. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions.

  About Visual Lease
  

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contact
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Visual Lease & Grant Thornton to Co-Present ASC 842 Educational Webinar Series first appeared on Visual Lease.]]> https://visuallease.com/gasb-statement-no-99-the-impact-on-lease-accounting/ Tue, 07 Jun 2022 20:04:19 +0000 https://visuallease.com/?p=7131

  

  Suppose you’re an accountant who manages leases or a lease administrator working for a state, country or local government. You may even work for a public entity such as a public university, college, hospital, utility or airport. In either case, you are affected by this new Statement No. 99 and we’ve provided this summary to help you to quickly understand the impact on lease accounting under GASB 87 and accounting for SBITAs under GASB 96.

  Governmental Accounting Standards Board (GASB) Statement No. 99, Omnibus 2022 was released in April 2022. It started as an Omnibus project which GASB creates when enough issues and technical inconsistencies are identified across the existing body of Statements.

  Statement No. 99 responds to practice issues raised as the statements were adopted and to address accounting and financial reporting for financial guarantees. The following covers the practice issues impacting lease accounting (GASB 87) and accounting for SBITAs (GASB 96).

  Practice Issues

  1. Determining the lease term, also applies to the term of an SBITA (Statement 96)
  2. Classification of short-term leases, also applies to short-term SBITA (Statement 96)
  3. Recognition and measurement of lease liabilities and receivables, also applies to recognition and measurement of a subscription liability (Statement 96)
  4. Identification of lease incentives

  Effective Dates

  The requirements related to leases and SBITAs are effective for fiscal years beginning after June 15, 2022.

  1. Lease Term: Clarification of Lease Termination and Purchase Options

  GASB Statement 87 Paragraph 12

  The issue was raised to the Board that in certain situations, a purchase option could result in a lease liability that includes the present value of payments that would never be realized due to exercising the purchase option. The result would be an overstated present value. The Board believed the purchase option should be considered as an option to terminate and used when considering the lease term. GASB 99 clarifies the lease term should exclude the period, if any, after the option is estimated to be exercised.

  The Board also addressed the prescriptive nature of the last sentence in paragraph 12 of Statement 87. They believed it could lead accountants to view a lease termination due to the violation of contract terms and conditions as a termination option. GASB 99 clarifies what constitutes a lease termination option as an unconditional right in the lease contract. GASB 99 also clarified that this should only be applied to contracts that transfer ownership (paragraph 19 of GASB 87).

  2. Short Term Leases: Clarification of Cancellable Periods and Lease Extensions

  GASB Statement 87 Paragraph 16

  Cancellable periods in Statement 87 differed from Statement 96 and Implementation Guide 2019-3. Clarification provided by this Statement 99 aligns 87 and 96 with the same definition which includes that both parties to the lease have an option to terminate the lease without the need for permission, and/or both parties must agree to extend the lease term.

  Another issue the Board responds to in this Statement is how to assess a short-term lease when an extension is created. The concern was that only considering the remaining term may influence entities to structure their leases to avoid recognition. The clarification is that the extension of a lease requires the lease to be reassessed and if the term (original lease term plus the modified term) is greater than 12 months, the lease needs to be reclassified. For a lease that is reclassified from a short-term lease, the measurement of the lease receivable or liability should be from the modification’s start date. This Statement also applies to paragraph 13 of Statement 96 for SBITAs.

  3. Lessee and Lessor: Clarification of Variable Payments and Lease Remeasurements

  Other Than Short-Term Leases and Contracts That Transfer Ownership
  Lessee GASB Statement 87 Paragraphs 21, 22, 26 & 28
  Lessor GASB Statement 87 Paragraphs 44, 45 & 50

  Accountants raised concern over what variable payments should be included in the lease liability or receivable. To clarify, variable payments, per paragraphs 21, 22, 44 and 45 of GASB 87, that are calculated using an index or rate (such as the Consumer Price Index or a market interest rate) or that are fixed in substance should be included as part of the lease liability and receivable. All other variable payments, including those based on usage of the asset by the lessee, should not be included.

  The Board also addressed a lease remeasurement issue. They noted that by including language that a lease is “not required” to be remeasured, the lease accountant believed this meant they had the option to remeasure. To clarify, GASB 99 states that a lease liability or receivable remeasurement should not be carried out solely due to a change in an index or the variable payment rate nor, for lessees, should the discount rate be reassessed solely due to a change in the incremental borrowing rate. This also applies to the remeasurement of a subscription liability in Statement 96.

  4. Clarification of Lease Incentives

  Paragraph 61 of GASB 87

  The Board believes the original language in this paragraph needed to be adjusted given lease incentives paid to or on behalf of a lessee does not imply the lessor has legally assumed the preexisting lease obligation. To clarify GASB 99 adjusted the language to read:

  “a lease incentive is equivalent to a rebate or discount and includes an assumption of, or an agreement to pay, a lessee’s preexisting lease obligations to a third party, other reimbursements of lessee costs, rent holidays, and reductions of interest or principal charges by the lessor.”

  
  The post GASB Statement No. 99: The Impact on GASB 87 and GASB 96 Compliance first appeared on Visual Lease.]]> https://medium.com/authority-magazine/marc-betesh-of-visual-lease-on-the-5-things-you-need-to-know-to-create-a-successful-app-saas-or-58e5f31d9ee4#new_tab Thu, 02 Jun 2022 14:21:36 +0000 https://visuallease.com/?p=7148 As part of my series about the “5 Things You Need To Know To Create a Successful App or SaaS”, I had the pleasure of interviewing Marc Betesh. Marc Betesh...
  The post Article: Marc Betesh of Visual Lease On The 5 Things You Need To Know To Create a Successful App, SaaS or Software Business first appeared on Visual Lease.]]> As part of my series about the “5 Things You Need To Know To Create a Successful App or SaaS”, I had the pleasure of interviewing Marc Betesh.

  Marc Betesh is the founder and CEO of Visual Lease, the #1 lease optimization software provider, and KBA Lease Services, the nation’s leading lease audit firm. Betesh helped shape the current lease accounting standards in the industry and is a thought leader on ASC 842, GASB 87, and IFRS 16. Betesh is regarded as “top-rated faculty” at CoreNet Global Learning and has lectured on lease topics at New York University’s Real Estate Institute, American Bar Association, Association of the Bar of the City of New York, Practicing Law Institute, ICSC, Lorman Education Services and the Institute of Internal Auditors. He is also an active member of the New York and New Jersey Bars.

  The post Article: Marc Betesh of Visual Lease On The 5 Things You Need To Know To Create a Successful App, SaaS or Software Business first appeared on Visual Lease.]]> https://www.cpapracticeadvisor.com/sales-tax-compliance/news/21270730/pros-on-the-move-june-2022#new_tab Wed, 01 Jun 2022 14:24:51 +0000 https://visuallease.com/?p=7149 Professionals on the Move is a round-up of recent staffing announcements and promotions in and around the tax and accounting space. Carrie Summerlin Named FICPA’s New Chief Growth & Innovation...
  The post Article: Pros on the Move – June 2022 first appeared on Visual Lease.]]> Professionals on the Move is a round-up of recent staffing announcements and promotions in and around the tax and accounting space.

  Carrie Summerlin Named FICPA’s New Chief Growth & Innovation Officer

  The Florida Institute of Certified Public Accountants (FICPA) recently announced that Carrie Summerlin has been named the Institute’s new Chief Growth and Innovation Officer. She will officially join the FICPA on Monday, May 16.

  The post Article: Pros on the Move – June 2022 first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-appoints-robert-michlewicz-as-president/ Wed, 01 Jun 2022 12:55:38 +0000 https://visuallease.com/?p=7104 Fin-tech veteran to oversee strategic business operations at the leading lease accounting and management solution provider Woodbridge, NJ – June 1, 2022 — Visual Lease, the #1 lease optimization software...
  The post Visual Lease Appoints Robert Michlewicz as President first appeared on Visual Lease.]]> Fin-tech veteran to oversee strategic business operations at the leading lease accounting
  and management solution provider

  Woodbridge, NJ – June 1, 2022 — Visual Lease, the #1 lease optimization software provider, today announced that Robert Michlewicz has been named President. In his role, Michlewicz will oversee the company’s Corporate Strategy, Product, Engineering, Marketing, Sales and Customer Service functions.

  Michlewicz has more than two decades of experience in the financial technology sector, driving operational excellence in several high-growth companies. Most recently, he was Chief Strategy Officer at Trintech, a leading provider of global Financial Corporate Performance Management (FCPM) software. During his nearly 11 years there, the company maintained double-digital annual recurring revenue (ARR) growth, year-over-year. Prior to Trintech, Michlewicz was the Regional President for Bowne & Co. (former NYSE) the largest global disclosure management firm and was President of Chas. P. Young Co., where his company played a vital role in newly expanded SEC regulatory compliance reporting.

  “We are thrilled to welcome Robert to our business,” said Visual Lease’s founder and CEO, Marc Betesh. “In Q1, we reported an increase of nearly 40% in both customer and employee count, year-over-year. We know that with Robert’s expertise and experience, we can expect to continue on this growth trajectory, while providing our growing community of customers with the software and services they need to achieve and sustain confident lease accounting compliance.”

  “Given just how important leases have become to organizations across all sizes and industries, Visual Lease has an abundant opportunity for growth,” said Michlewicz. “I’m confident in our product and our team and that Visual Lease will continue its upward path as the premier option for lease accounting, management and optimization.”

  “As Visual Lease continues to drive significant growth, it is the perfect time for Robert to join the organization,” said Paul Byrne, CEO and President at Zai and a current member of Visual Lease’s Board of Directors. “I have worked alongside Robert and am acutely familiar with his ability to successfully grow and scale businesses by building and leading high-performing teams that consistently exceed company objectives.”

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contact

  Karen Lee
  Caliber Public Relations
  T+1 929 269 4436
  karen@calibercorporateadvisers.com

  

  The post Visual Lease Appoints Robert Michlewicz as President first appeared on Visual Lease.]]> https://visuallease.com/buyers-guide-to-gasb-87-lease-accounting-software/ Tue, 31 May 2022 22:46:02 +0000 https://visuallease.com/?p=7111

  How to make an informed decision on your lease accounting solution 

  Investing in a dedicated lease accounting solution is the best way to achieve GASB 87 compliance. The lease accounting standard requires operating leases to be recorded on the balance sheet in the form of right of use (ROU) assets with corresponding lease liabilities. Doing this well – and with accuracy – means choosing technology that can automate required reports and calculations, and support ongoing management of your leases.  

  However, it’s not always clear which solution is best for your organization. While tools like Excel have certainly been useful for accounting purposes in the past, it’s not the ideal choice for something as complex as achieving and maintaining lease accounting compliance.  

  Just like your leases, lease accounting requirements may change and evolve over time. It’s critical to stay on top of these changes to stay compliant, and with the right lease accounting software, you’ll be able to do so effectively. 

  In this blog, we will share a summary of the information that can be found within our Buyer’s Guide to Lease Accounting Software for GASB Compliance, so you can feel confident about your selected lease accounting solution.  

  Who should be involved?

  To get (and stay) compliant, it’s important to involve key personnel that represent various functional areas across your business. This often includes departments like accounting, procurement, contracting and more.  

  Including cross-departmental stakeholders ensures you have visibility into every lease held by your organization, and enables you to easily track any lease changes over time.  

  In the Buyer’s Guide, we share questions for you to consider when identifying which stakeholders should be involved, such as: 

  • How does your organization acquire leases? 
  • How does your accounting team receive notification when other teams add new leases, or make lease changes? 
  • How does your organization make strategic decisions about renewals and asset use? 

  Risks that arise without lease accounting software

  In a recent VLDI report, a staggering 99% of surveyed senior finance and accounting professionals acknowledged real fears in potentially misreporting their lease information. This points to a critical need for automation, as manual solutions (e.g. Excel) put you at higher risk of error.  

  Under GASB 87, inaccurate lease accounting financials can result in increased audit fees and fines, damage to your organization’s reputation and potential legal action.  

  In addition to providing automation, dedicated lease accounting technology should solve your existing (and future) pain points, such as:  

  • Pain Point
  • Solution

  Pain Point	Solution
  Organizations often have time constraints and lack of resources dedicated to lease accounting.	Save time by selecting lease accounting software with flexible, intuitive tools that enable you to easily control your leases and run financial reports. The software should also have accessible training for every user and various accounting partnerships, including managed services.
  Organizations often lack control and visibility into their leases and lease data.	Lease accounting software should make it easy to account for and view every lease at-a-glance, including unique clauses and options. Further, it should include lease administration capabilities to track key clauses, obligations, options and critical dates that might be buried in a 200-500 page document.
  Organizations may lack confidence producing accurate accounting calculations and reports.	Gain confidence by selecting a lease accounting software that provides: Automated, reliable calculations Transparency into the math backing the calculations Comprehensive remeasurement calculations to keep you compliant through Day 2 Third-party auditing to ensure data security and calculation accuracy This ensures your data is safe -- and your disclosures are accurate.

  Lease accounting need-to-knows

  Preparing for lease accounting is time-consuming. It requires a lot of time and effort to identify, gather and organize lease data. In particular, embedded leases (lease components within a contract) are more difficult to locate and often require more time to pinpoint. And, regardless of how many leases you have, gathering leases is a tedious and lengthy process, which is why organizations should get started as early as possible. 

  Also, remember that lease accounting compliance isn’t a one and done disclosure; it’s ongoing. Therefore, your solution should support ongoing maintenance of your lease portfolio.  

  Don’t delay – invest in the right solution

  Selecting the right lease accounting solution isn’t easy, but it’s critical to ensure you are set up for success with GASB 87.  

  With our Buyer’s Guide to Lease Accounting Software for GASB Compliance, you will be able to make an informed decision about which lease accounting technology is right for your organization.

  You will get insight into:
  
  The non-negotiable capabilities you need to get and maintain compliance with GASB 87
  
  How to identify and align internal stakeholders on a strategy and solution
  
  Potential roadblocks and what you need to know to get around them
  Click here to download
  The post Buyer’s Guide to GASB 87 Lease Accounting Software first appeared on Visual Lease.]]> https://visuallease.com/lease-accounting-building-confidence-in-compliance-efforts/ Tue, 24 May 2022 18:29:41 +0000 https://visuallease.com/?p=7095 On-demand webinar summary  Lease accounting is an incredibly time-consuming, complex endeavor that involves a lot of initial preparation, cross-departmental collaboration and ongoing maintenance. So, how can businesses ensure their lease...
  The post Lease Accounting: Building confidence in compliance efforts first appeared on Visual Lease.]]> On-demand webinar summary 

  Lease accounting is an incredibly time-consuming, complex endeavor that involves a lot of initial preparation, cross-departmental collaboration and ongoing maintenance. So, how can businesses ensure their lease accounting remains reliable and accurate?  

  In our recent webinar, Lease Accounting: Building confidence in compliance efforts, Joe Fitzgerald, SVP of Lease Market Strategy at Visual Lease, and Denise Hinkle, Principal of Business Development at Scribcor Global, covered how businesses can successfully prepare for lease accounting and offered tips about how to feel confident about compliance Many companies struggle to feel confident in their lease accounting compliance efforts with the new standards (ASC 842, IFRS 16 and GASB 87). 

  High-level takeaways from the webinar include: 

  What makes lease accounting so complex?

  There are multiple factors that make lease accounting difficult to both achieve and maintain. Besides the complex calculations required, leases themselves are lengthy and intricate. Typically, lease contracts are detailed documents with critical information such as obligations, clauses, options and dates. If your lease contracts are in different offices or handled by different departments, they may be difficult to locate and identify. 

  Further, any changes within your leases must be represented on the balance sheet, or you risk misreporting your company’s lease information.  

  Misreporting lease financials can result in increased audit fees and fines, along with damage to your company’s reputation and the risk of legal action. It’s important to keep this in mind as you prepare for lease accounting.

  How to prepare for lease accounting success

  There are steps you can take that have been proven to set you up for success. In this webinar, you will learn about each one, including but not limited to: 

  • Establishing a dedicated team 
    • Who needs to be involved? 
    • What are they responsible for?  
    • Which departments need to be consulted? 
  • Identifying your leases 
    • What are best practices to do this? 
    • Where do you begin? 
  • Determining a reliable process 
    • What will it take to adopt and maintain the lease accounting standard? 
    • What are the risks of your identified solution? 
    • What should you (and should you not) do? 
  • Creating a post-adoption plan 
    • How will you account for ongoing lease data maintenance? 
    • Who will be responsible, and for what? 
    • What will your processes look like? 

  For more information about how to be confident in your lease accounting compliance efforts, view our on-demand webinar, Lease Accounting: Building confidence in compliance efforts.  

  The post Lease Accounting: Building confidence in compliance efforts first appeared on Visual Lease.]]> https://visuallease.com/how-to-optimize-your-equipment-leases-while-accomplishing-lease-accounting-compliance-on-demand-webinar/ Tue, 17 May 2022 17:40:29 +0000 https://visuallease.com/?p=7091 On-demand webinar summary  Do you know if you are overpaying for your leases? Unfortunately, many businesses are, but are not aware of it until after they begin tracking their lease...
  The post How to optimize your equipment leases while accomplishing lease accounting compliance first appeared on Visual Lease.]]> On-demand webinar summary 

  Do you know if you are overpaying for your leases? Unfortunately, many businesses are, but are not aware of it until after they begin tracking their lease data to comply with the new lease accounting standards (ASC 842 and IFRS 16). This is often due to the lack of visibility into lease terms, such as expiration dates, options and more. 

  In particular, businesses in the manufacturing industry often have a large volume (hundreds and thousands) of equipment leases that they lack visibility into. This lack of control often costs them a significant amount of money.  

  In our recent webinar, How to optimize your equipment leases while accomplishing lease accounting compliance, Joe Fitzgerald, SVP of Lease Market Strategy at Visual Lease, and Jon Hunke, VP of Accounting and EIT at MDU Construction Services Group, shared why and how businesses should optimize their lease portfolios while accomplishing lease accounting.  

  Some key takeaways from the webinar include: 

  Lease optimization is the next logical step after lease accounting 

  Although lease accounting is an elaborate and complex process, when done right, it can also provide additional advantages beyond compliance. In fact, in a recent VLDI report, 100% of surveyed senior finance and accounting professionals acknowledged that lease accounting compliance comes with real business benefits.   

  This is because once all your lease data is in an easily accessible, reliable location, you’ll be in a better position to analyze your leases and identify new opportunities for savings. This is where lease optimization comes into play.  

  Lease optimization will help you make strategic leasing decisions 

  The process of lease optimization enables you to revisit existing leases and bridge gaps to make better informed business decisions, such as identifying an opportunity to purchase an existing lease rather than continuing to lease a particular asset or property. Optimizing your equipment leases also empowers your business to: 

  • Level-set lease rates across your lease portfolio, 
  • Improve vendor management, 
  • And more (further defined further in the webinar). 

  Lease optimization leads to significant cost savings

  Having visibility into your leases also enables you to identify areas where you may be overpaying for leases. Before businesses optimized their lease portfolio, many have found that they significantly overpaid for existing leases due to lack of awareness into the contract terms.  

  In example, a large manufacturing company lost $105k because they did not realize that their lessor was continuing to bill expenses for surrendered property. 

  For more insight about the steps you can take to optimize your lease portfolio, view our on-demand webinar, How to optimize your equipment leases while accomplishing lease accounting compliance.  

  The post How to optimize your equipment leases while accomplishing lease accounting compliance first appeared on Visual Lease.]]> https://www.digitaljournal.com/business/qa-new-standards-are-reshaping-lease-accounting/article#new_tab Tue, 17 May 2022 16:42:40 +0000 https://visuallease.com/?p=7089 The introduction of lease accounting standards has forever altered how public, private and government entities manage, track and report on their leases. To understand more about the leasing sector and...
  The post Article: Q&A: New standards are reshaping lease accounting first appeared on Visual Lease.]]> The introduction of lease accounting standards has forever altered how public, private and government entities manage, track and report on their leases. To understand more about the leasing sector and the impact that new standards are having, Digital Journal spoke with Joe Fitzgerald, SVP of Lease Market Strategy at Visual Lease
  The post Article: Q&A: New standards are reshaping lease accounting first appeared on Visual Lease.]]> https://visuallease.com/the-impact-of-asc-842-on-lessees-and-lessors/ Fri, 06 May 2022 17:51:37 +0000 https://visuallease.com/?p=7081 The new lease accounting standards have radically changed the way private and public companies record leases on the balance sheet. Naturally, this had a direct impact on lessees, lessors and...
  The post The impact of ASC 842 on lessees and lessors first appeared on Visual Lease.]]>

  The new lease accounting standards have radically changed the way private and public companies record leases on the balance sheet. Naturally, this had a direct impact on lessees, lessors and how they classify lease agreements.

  Under ASC 842, lease agreements are defined as “a contract, or part of a contract, between a lessor and a lessee that conveys the right to control the use of identified property, plant, or equipment (an identified asset) to the lessee for a period of time in exchange for consideration.“

  Both the lessee and lessor are signatories to the agreement and must abide by its rules. Additionally, both parties will need to classify what kind of lease the agreement is, either finance or operating as defined under ASC 842.

  What’s the difference between a lessor and a lessee?

  Before we review how both parties classify a lease under ASC 842, let’s take a look at the definitions of a lessor and lessee.

  The lessor is the party that either owns or leases and subleases the asset – which can range from property, vehicles or equipment.

  The lessee is the party receiving the right to use the asset for a specified period of time, per the lease agreement.

  Under ASC 842, the definitions of a lessor and lessee haven’t necessarily changed, however, both parties must change how they present leases in their financial statements.

  For the first time, lessees must show all leasing obligations, including operating leases, on the balance sheet – and classify them either as operating or finance leases.

  Before ASC 842, operating leases were not included in the balance sheet. This is one of the larger changes lessees must address under ASC 842. Luckily for lessors, this change isn’t as significant because they already had to make these classifications prior to the new lease accounting standard.

  What’s the difference between an operating lease and a finance lease?

  ASC 842 requires the classification of a lease at the commencement of the lease agreement, based on specified economic criteria. It’s important for both parties to understand these criteria as they determine differences between and classification of an operating lease and a finance lease.

  Operating leases are contracts that permit the use of a certain asset without transferring the ownership of that asset for any less than a major part of the asset’s life. For example, the lessee uses the asset, while the lessor provides the maintenance or upkeep of the asset. Expenses related to operating leases were not previously recorded on a company’s balance sheet until ASC 842. The leased asset, along with the corresponding liabilities, are now presented on the balance sheet.

  A finance lease is a contract that does not qualify as an operating lease; the risks and rewards associated with the leased asset get transferred to the lessee. In other words, they have full control of the asset. Under ASC 842, finance leases continue to be recorded on the lessee’s balance sheet as an asset with a corresponding liability.

  The impact of ASC 842 and the importance of lease accounting software

  Although lessees and lessors have not fundamentally changed under ASC 842, the impact of the new lease accounting standard has required both parties (especially lessees) to classify their leases with a higher degree of scrutiny.

  Given the transparent nature of ASC 842, whether it’s a finance or operating lease, both parties need to ensure they are properly accounting for them on the balance sheet.

  Lease classification is just one of the many complexities of ASC 842. To ensure your lease data and financial reports remain accurate, you’ll want to make sure your lease data is always up-to-date and organized in one centralized location. By utilizing lease management and lease accounting software such as Visual Lease, you’ll be able to leverage the platform as your single source of truth to manage and track your lease data.

  Visit our blog to stay up to date on the latest news, trends and tips in lease accounting.

  Looking for more information or have a lease accounting question? Get in touch with one of our lease accounting experts. Click here to schedule time with one now.

   

  The post The impact of ASC 842 on lessees and lessors first appeared on Visual Lease.]]> https://visuallease.com/gasb-87-roundtable-discussion-recap-anticipating-common-lease-accounting-challenges/ Fri, 06 May 2022 17:29:56 +0000 https://visuallease.com/?p=7079
  

  On-demand webinar summary 

  The GASB 87 Roundtable Discussion is a webinar series hosted by Visual Lease. Each webinar provides insights by our panelists regarding specific topics around GASB 87. Previously, our panelists discussed how to maximize the value of your lease accounting software.

  In our latest episode, Anticipating Common Lease Accounting Challenges, host Joseph Fitzgerald, SVP of Lease Market Strategy at Visual Lease, discussed how organizations can anticipate and prepare for Day 2 challenges. Our panelists, Michael Luff, CPA & Technical Leader at CLA, Rosemary Courtney, Manager of Technical Accounting at Visual Lease, Todd Worms, Senior Manager of Customer Support at Visual Lease and Bill Harter, Principal Solution Advisor at Visual Lease provided expert tips and advice to help attendees get ahead of these potential roadblocks.

  You should feel empowered to help ensure your organization is ready for what’s ahead. Let’s dive in.

  The importance of ongoing data management

  The quality of your lease data impacts the accuracy of your lease accounting calculations and reporting. As changes occur to a lease contract, complex components such as remeasurements and modifications must be accounted for under GASB 87. If these calculations are done manually by your organization, it’s typically a red flag for auditors, as this approach is more prone to human error.

  Top considerations for continued compliance

  Staying educated on GASB 87 is critical for your continued compliance. Maintaining and updating internal controls over contracts and agreements are also crucial to ensure the integrity of the process. Further, collaboration and communication between administration, accounting and any departments handling leases are necessary to ensure continued compliance.

  What to expect from your support team

  Once software implementation is complete, VL’s support team becomes the main point of contact for our clients. Typically, the support team will help clients understand how to use Visual Lease and are there to help troubleshoot any potential technical issues. Visual Lease prides itself in its unparalleled support and collaboration with its customers, and has invested heavily in creating the best support staff possible, which is why we have a 99% customer retention rate!

  Tips to ensure audit-readiness

  Working through extensive data validation to ensure your subledger details are consistent with your source documents should yield positive results for your organization’s audit. Documenting all input assumptions is also key to a smooth audit process, along with timely updates through process enhancements.

  Data integrity challenges

  Leveraging your lease accounting software is key to addressing common Day 2 challenges. Organizations can use software to maintain control over some of the lease accounting requirements, such as processing additions, terminations, modifications, etc. It’s also important to stay on top of deadlines and be proactive on the platform post-adoption.

  For more insight into common Day 2 GASB 87 lease accounting challenges, view our on-demand webinar “GASB 87 Roundtable Discussion: Anticipating Common Lease Accounting Challenges”.

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS solution has been used by over 1,000 companies with a 99% retention rate. 

  The post GASB 87 Roundtable Discussion Recap: Anticipating Common Lease Accounting Challenges first appeared on Visual Lease.]]> https://visuallease.com/how-to-avoid-lease-accounting-risks/ Tue, 26 Apr 2022 20:59:13 +0000 https://visuallease.com/?p=7063 On-demand webinar summary  According to a recent VLDI survey, 35% of private companies were less than halfway through or had not yet started the process of gathering information needed to...
  The post How to avoid lease accounting compliance risks first appeared on Visual Lease.]]> On-demand webinar summary 

  According to a recent VLDI survey, 35% of private companies were less than halfway through or had not yet started the process of gathering information needed to adopt ASC 842. This puts businesses in danger of misreporting lease financials, which exposes them to serious consequences, such as increased audit fees.  

  In our recent webinar, How to Avoid Lease Accounting Compliance Risks, Rosemary Courtney, Manager of Technical Accounting at Visual Lease, and Bill Harter, Principal Solution Advisor at Visual Lease, discussed common challenges and risks associated with lease accounting compliance. They also provided tips to ensure you are set up for a successful audit post-adoption.  

  As a result, you should have a better understanding of the risks of inaccurate lease financials and how to avoid these mistakes. Let’s take a closer look.  

  Lack of processes

  The new lease accounting standards require cross-functional collaboration in order to stay on top of any updates made to leases. Without clear responsibilities and defined processes, some critical lease updates may slip through the cracks – and put you at risk of inaccurate lease information. That’s why it’s important to develop defined, reliable processes that involve the right personnel while clearly identifying internal controls.  

  Manual accounting calculations

  Manual accounting calculations are not only time-consuming given the complexity of ASC 842, but they are also prone to human error. Automated technology significantly reduces both the risk of miscalculation and time spent on reporting. 

  Lack of dedicated resources

  It’s rare for companies to have a dedicated resource for lease accounting. So, how do you ensure you stay compliant amidst employee turnover? Our experts agree that naming a project lead in each functional area that contributes to the lease portfolio is the best approach, such as finance, real estate and legal.  

  Lack of visibility into maintaining lease information

  Leases change all of the time (i.e. extend, terminate) and each change needs to be accounted for on the balance sheet. It can be difficult to ensure your lease data is up to date if your leases are not in an accessible, centralized location.  

  For more insight into how to prepare for lease accounting success, view our on-demand webinar “How to Avoid Lease Accounting Compliance Risks”.   

  Related Resources: 

  • Five Questions That Should Be On Every Financial Leader’s Mind 

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS solution has been used by over 1,000 companies with a 99% retention rate.   

   

  The post How to avoid lease accounting compliance risks first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesbusinesscouncil/2022/04/15/how-lease-optimization-can-benefit-your-company/?sh=71d230bc625f#new_tab Wed, 20 Apr 2022 18:52:41 +0000 https://visuallease.com/?p=7058 In response to the ongoing impact of the global pandemic on revenues and business operations, companies are evolving how they prioritize and manage their commercial real estate leases. Many organizations...
  The post Article: How Lease Optimization Can Benefit Your Company first appeared on Visual Lease.]]> In response to the ongoing impact of the global pandemic on revenues and business operations, companies are evolving how they prioritize and manage their commercial real estate leases. Many organizations are optimizing their lease portfolios, which means that in addition to closely monitoring and tracking their leases, they’re also analyzing to ensure that they get the most value from them.
  The post Article: How Lease Optimization Can Benefit Your Company first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-reports-first-quarter-2022-results/ Mon, 18 Apr 2022 15:41:12 +0000 https://visuallease.com/?p=7053 Company achieves double-digit YoY annual recurring revenue, customer and employee growth Woodbridge, NJ – April 18, 2022 — Visual Lease, the #1 lease optimization software provider, today announced results from...
  The post Visual Lease Reports First Quarter 2022 Results first appeared on Visual Lease.]]>

  Company achieves double-digit YoY annual recurring revenue, customer and employee growth

  Woodbridge, NJ – April 18, 2022 — Visual Lease, the #1 lease optimization software provider, today announced results from Q1 2022, reporting an increase of nearly 40% in both customer and employee count, year-over-year. The company also announced an increase of nearly 30% in annual recurring revenue year-over-year, continuing its path of sustained double-digit growth. Today, Visual Lease helps more than 1,000 public and private companies, as well as government entities, with lease accounting compliance and the financial, legal and operational performance of their leased assets.

  “With the introduction of the new lease accounting standards – IFRS 16, ASC 842 and GASB 87 – the stakes are much higher for organizations that do not have a sustainable way to effectively manage and track their leases,” said founder and CEO, Marc Betesh. “Because we’ve spent more than three decades helping companies manage their lease portfolios, we know exactly what is required to avoid the consequences of misrepresenting lease data during an audit. We provide the software, services and subject matter expertise that make achieving and maintaining lease accounting compliance one less thing that accountants and financial managers have to worry about. With Visual Lease, organizations will also benefit from a friction-free annual audit, in addition to greater visibility across their portfolios as their leases continue to evolve.”

  Here are a few of the milestones Visual Lease achieved in Q1 2022:

  • Expanded its Alliance Partner network across premium accounting firms and services companies, including F.H. Black & Company and Withum, to offer mutual clients best-in-class software and services.
  • Hired across all departments and expanded its commitment to ongoing innovation by scaling the Product & Engineering teams by 35% year-over-year.
  • Was named a Momentum Leader and a High Performer in the Lease Administration category in the G2 Spring Grid Report.
  • Continued investments to further enhance the Visual Lease user interface (UI), building on its reputation of having an intuitive and easy-to-use platform.
  • Held its Q1 Customer Advisory Board (CAB) meeting, gathering select financial management and real estate executives from its network of customers spanning the retail, hospitality, telecommunications, construction, financial services and manufacturing industries, to share insights and solicit input into the company’s solutions, services and strategic investments.
  • Established an AWS data center in Frankfurt, Germany, enabling EU-based clients to benefit from stronger performance, newer services and features, as well as automatic compliance with residency and regulatory laws regarding their data.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

   

  The post Visual Lease Reports First Quarter 2022 Results first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-announces-educational-webinar-lineup-for-q2/ Tue, 12 Apr 2022 20:26:25 +0000 https://visuallease.com/?p=7051 Industry leader continues to host virtual events to help companies master lease accounting compliance Woodbridge, NJ – April 12, 2022 —Visual Lease, the #1 lease optimization software provider, announced its...
  The post Visual Lease Announces Educational Webinar Lineup for Q2 first appeared on Visual Lease.]]>

  Industry leader continues to host virtual events to help companies master lease accounting compliance

  Woodbridge, NJ – April 12, 2022 —Visual Lease, the #1 lease optimization software provider, announced its schedule for complimentary educational webinars for the second quarter of 2022. The company will continue to share industry best practices informed by more than three decades of helping businesses properly track, manage and now report on their leases under the new lease accounting standards, ASC 842, GASB 87 and IFRS 16.

  “Companies continue to underestimate what it takes to achieve and maintain lease accounting compliance,” said Visual Lease’s founder and CEO, Marc Betesh. “We know that having the right technology in place and committing to ongoing education can empower organizations to get ahead of common challenges. Our webinar series – much like our software – is designed to help businesses across all industries alleviate any stress that is associated with their lease accounting process.”

  Visual Lease’s Q2 webinar schedule covers the following topics:

  • Achieving Compliance
    • How to Avoid Lease Accounting Compliance Risks (April 21^st) – Get ahead of common risks associated with misreporting company information, such as increased audit fees, fines and potential legal ramifications.
    • GASB Monthly Planning Sessions (May 18^th and June 16^th) – Learn how to prepare for and execute the transition to GASB 87 and GASB 96 with supporting automated accounting technology.
    • How to Achieve Confident Lease Accounting Compliance (May 24^th) – Receive guidance from lease accounting experts to ensure that your organization is equipped to succeed in its compliance efforts.
  • Sustaining Compliance
    • ASC 842 Monthly Planning Sessions (April 13^th, May 11^th and June 14^th) – Benefit from expert tips and industry best practices to accelerate and maintain compliance with ASC 842.
    • GASB 87 Roundtable Discussion: Anticipating Day 2 Lease Accounting Challenges (April 27^th) – Hear directly from experienced technology and accounting experts about different Day 2 lease accounting considerations, including how to keep up with frequent lease modifications and how to ensure long-term compliance and audit readiness.
    • The Cross-Functional Power of Centralized Lease Data (June 23^rd) – Learn about the wide-ranging business benefits of maintaining lease data in one central location.

  For additional details, registration information and updates on opportunities to earn CPE credits, please visit Visual Lease’s events page, which will be regularly updated.

  About Visual Lease
  

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 1,000+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contact
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  The post Visual Lease Announces Educational Webinar Lineup for Q2 first appeared on Visual Lease.]]> https://podcasts.apple.com/us/podcast/talking-leases-the-story-behind-visual-lease-and/id1546092432?i=1000555885214#new_tab Wed, 06 Apr 2022 14:51:39 +0000 https://visuallease.com/?p=7008 We’re back in 2022 with a Season 2 bonus episode! After a bunch of attempts to connect at the end of 2021, Marc and Chase finally got together to discuss...
  The post Podcast: Talking Leases: The Story Behind Visual Lease and the Current State of Leasing (with Marc Betesh of Visual Lease) first appeared on Visual Lease.]]> We’re back in 2022 with a Season 2 bonus episode! After a bunch of attempts to connect at the end of 2021, Marc and Chase finally got together to discuss the current state of leasing and the history behind Visual Lease, which was founded in 1996.
  The post Podcast: Talking Leases: The Story Behind Visual Lease and the Current State of Leasing (with Marc Betesh of Visual Lease) first appeared on Visual Lease.]]> https://www.accountingtoday.com/news/government-accountants-procrastinating-on-gasb-leases-standard#new_tab Wed, 06 Apr 2022 13:53:36 +0000 https://visuallease.com/?p=7007 The standard in some ways parallels the ASC 842 leases standard for public and private companies and nonprofits from the Financial Accounting Standards Board and the IFRS 16 leases standard...
  The post Article: Government accountants procrastinating on GASB leases standard first appeared on Visual Lease.]]> The standard in some ways parallels the ASC 842 leases standard for public and private companies and nonprofits from the Financial Accounting Standards Board and the IFRS 16 leases standard from the International Accounting Standards Board in that it would put leases on the balance sheet for the first time for many entities. For companies in the private sector, many of them also procrastinated on implementing the leasing standard, despite extensions from both FASB and the IASB during the pandemic. Now state and local governments will be facing similar issues as they try to account for this past fiscal year.
  The post Article: Government accountants procrastinating on GASB leases standard first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesfinancecouncil/2022/03/30/five-questions-that-should-be-on-every-financial-leaders-mind/?sh=75d3f5286880#new_tab Thu, 31 Mar 2022 20:57:51 +0000 https://visuallease.com/?p=7004 The introduction of new lease accounting standards (ASC 842, IFRS 16 and GASB 87) has had a significant impact upon accounting and reporting for U.S. publicly traded and private companies,...
  The post Article: Five Questions That Should Be On Every Financial Leader’s Mind first appeared on Visual Lease.]]> The introduction of new lease accounting standards (ASC 842, IFRS 16 and GASB 87) has had a significant impact upon accounting and reporting for U.S. publicly traded and private companies, as well as non-U.S. companies and government entities.

  Now, all of these organizations must adhere to a much more robust and complex reporting process than they had been accustomed to under the prior lease accounting standards. Despite this change, many continue to underestimate just how challenging the lease accounting process truly is.

  The post Article: Five Questions That Should Be On Every Financial Leader’s Mind first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbestechcouncil/2022/03/17/how-to-maximize-your-lease-accounting-software-investment/?sh=71c702224285#new_tab Thu, 31 Mar 2022 20:56:09 +0000 https://visuallease.com/?p=7001 The past two years have shuffled business priorities and workflows, which has left many companies catching up on their transition to the new lease accounting standards (ASC 842, GASB 87,...
  The post Article: How To Maximize Your Lease Accounting Software Investment first appeared on Visual Lease.]]> The past two years have shuffled business priorities and workflows, which has left many companies catching up on their transition to the new lease accounting standards (ASC 842, GASB 87, IFRS 16 and, soon, GASB 96).
  The post Article: How To Maximize Your Lease Accounting Software Investment first appeared on Visual Lease.]]> https://visuallease.com/what-is-ifrs-16-what-do-i-need-to-know/ Tue, 29 Mar 2022 18:24:20 +0000 https://visuallease.com/?p=6990 What is IFRS 16? What changed under IFRS 16? What is considered a lease under IFRS 16? Exceptions to the IFRS 16 Lease Accounting Standard IFRS 16 Impact on Financial...
  The post What is IFRS 16 & What Do I Need to Know? first appeared on Visual Lease.]]>
  • What is IFRS 16?
  • What changed under IFRS 16?
  • What is considered a lease under IFRS 16?
  • Exceptions to the IFRS 16 Lease Accounting Standard
  • IFRS 16 Impact on Financial Reporting
  • IFRS 16 Impact on the Balance Sheet
  • IFRS 16 Impact on Profits and Loss Statement
  • IFRS 16 Impact on Cashflow Statement
  • Who Does IFRS 16 Impact?
  • History of IFRS 16

  What is IFRS 16?

  IFRS 16 Summary: What is IFRS 16?

  The International Accounting Standards Board (IASB) published the new IFRS 16 lease accounting standard, which replaces IAS 17. For the global community, IASB is responsible for developing and promoting the International Financial Reporting Standards (IFRS) for accounting.

  What changed under IFRS 16?

  IFRS 16 changes the way companies account for leases in their financial disclosures, including balance sheets and income statements. Under IFRS 16, a lessee applies a single lease accounting model where leases are considered finance leases.  A lessor classifies a lease as either a finance lease or an operating lease.

  Here’s what Ernst & Young (EY) says about the changes: “Whether you report under International Financial Reporting Standards (IFRS) or U.S. GAAP, you are likely to be facing significant changes in reporting requirements as you assess the impact of new standards for revenue recognition, financial instruments, and lease accounting. And these changes are not just impacting organizations reporting under IFRS and US GAAP — many national accounting standard setters are also aligning local standards to IFRS.” Read more here: IFRS Compliance Software & New IFRS Lease Accounting Changes

  IFRS Compliance Software

  What is considered a lease under IFRS 16?

  Under IFRS 16, a lease is defined as a contract that enables international businesses to use another entity’s identified asset for a specified period of time in exchange for consideration. Common leased assets include:

  • Real estate property, buildings, offices and warehouses
  • Office equipment
  • Medical equipment
  • IT equipment
  • Vehicles (automobiles, trucks, vans)

  These contracts must specify a timeline in which the right-of-use of the asset is established (or an identified amount of use). It should also include all the potential economic benefits from using said asset. Simply put, some contracts that may not have been considered a lease with the original IAS 17 compliance standard, may now be a lease under IFRS 16 – and must be added to the balance sheet.

  Exceptions to the IFRS 16 Lease Accounting Standard

  Under the International Financial Reporting Standards (IFRS) 16, the lease accounting standard, there are a few exceptions or specific scenarios where certain leases may be excluded or treated differently. Here are some exceptions to IFRS 16:

  • Short-term leases: Leases with a lease term of 12 months or less and that do not contain a purchase option are considered short-term leases. Entities can choose to exclude short-term leases from recognizing lease assets and liabilities on the balance sheet. Instead, they can expense the lease payments on a straight-line basis over the lease term.
  • Low-value leases: Leases of assets with a low value (i.e. under $5,000) when new, such as small office equipment or computer peripherals, can be excluded from the balance sheet. While there is no specific threshold defined in IFRS 16, it suggests that a materiality-based approach can be adopted for such leases.
  • Leases of biological assets: Leases of biological assets within the scope of IAS 41, Agriculture, are exempted from the requirements of IFRS 16. These leases are accounted for under the applicable provisions of IAS 41.
  • Leases of minerals, oil, natural gas, and similar assets: Exploration and evaluation assets, as defined in IFRS 6, Exploration for and Evaluation of Mineral Resources, are excluded from the scope of IFRS 16. Therefore, leases of minerals, oil, natural gas, and similar assets are not subject to the requirements of IFRS 16.
  • It’s important to note that the specific application of these exceptions may vary depending on the circumstances and professional judgment exercised by the reporting entity. It is recommended to consult the full text of IFRS 16 and seek guidance from accounting professionals or standard-setting bodies for specific situations.

  IFRS 16 Impact on Financial Reporting

  IFRS 16 has a significant impact on financial reporting, affecting the balance sheets, profit and loss statements, and cash flow statements of companies. It’s important to note that the impact of IFRS 16 on financial reporting can vary depending on the specific lease arrangements and the nature of the business. Companies should carefully assess the implications and ensure accurate and transparent reporting in accordance with the standard.

  IFRS 16 Impact on the Balance Sheet

  Recognition of lease assets: Under IFRS 16, lessees are required to recognize lease assets, representing the right to use the leased asset, on the balance sheet. This increases the total assets of the company.

  Recognition of lease liabilities: In addition to lease assets, lessees must recognize lease liabilities, representing their obligation to make lease payments, on the balance sheet. This increases the total liabilities of the company.

  Change in presentation: The classification of leases as operating leases or finance leases, which was previously used under IAS 17, is eliminated. Instead, the balance sheet shows a single category of lease assets and lease liabilities.

  However, if a lease’s terms happen to be under 12 months or low value under $5,000, they will typically be exempt from this new rule (assuming the asset itself isn’t recognized as high value or has purchase options).

  IFRS 16 Impact on Profits and Loss Statement

  Changes in expense recognition: Under IFRS 16, lessees are required to recognize both interest expense on the lease liability and depreciation of the right-of-use asset. This replaces the straight-line operating lease expense recognition under IAS 17. As a result, the profit and loss statement shows higher expenses in the earlier years of the lease and lower expenses in the later years.

  Impact on EBITDA and operating profit: The changes in lease expense recognition affect EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and operating profit. EBITDA increases as lease expenses previously classified as operating expenses are replaced by depreciation and interest expenses. Operating profit may also be affected due to changes in lease-related costs.

  IFRS 16 Impact on Cashflow Statement

  Changes in cash flow presentation: Under IFRS 16, lease payments are classified differently in the cash flow statement compared to IAS 17. The operating lease payments, previously presented as operating cash outflows, are now divided into a principal portion classified as financing activities and an interest portion classified as operating or financing activities.

  Impact on operating cash flow: The classification of lease payments and the inclusion of interest and principal portions affect the operating cash flow. In the earlier years of the lease, operating cash outflows decrease as a portion of lease payments is classified as financing activities. Conversely, financing cash flows increase as the principal portion is classified as such.

  Who Does IFRS 16 Impact?

  Lessees who follow the International Financial Reporting Standards are affected by the new lease accounting standard. Over 160 countries all over the world will need to adhere to IFRS 16, including Spain, Ukraine, United Kingdom, Russia, Norway, Brazil, Japan, France and more.

  History of IFRS 16

  The International Accounting Standards Board introduced IFRS 16 in 2016. It is one of the most significant changes to their lease accounting policies in over 25 years. The goal of the new standard was to create transparency in representing leases on the balance sheet for all international businesses. IFRS 16 replaces IAS 17 as the new standard that all companies who operate under IFRS must adhere by and went into effect on January 1st, 2019.

  Transition with IFRS 16 Software

  Visual Lease provides international businesses with the tools to achieve and maintain IFRS 16 compliance while unlocking financial opportunities within their lease portfolios. Visual Lease’s powerful and easy-to-use cloud-based solution automates lease accounting, all in one centralized location.

  Looking for a reliable lease accounting software? Click here to schedule a demo and see how Visual Lease can help you with IFRS 16.

  
  

  The post What is IFRS 16 & What Do I Need to Know? first appeared on Visual Lease.]]> https://irei.com/publications/article/office-market-bouncing-back-tenants-prioritizing-flexibility-lease-agreements/#new_tab Thu, 03 Mar 2022 14:06:55 +0000 https://visuallease.com/?p=6637 In early 2020, the COVID-19 pandemic redefined how businesses operate. Today, they continue to grapple with the ongoing effects of shutdowns, rent crises, supply chain issues and inflation. Many have...
  The post Article: Office market bouncing back, but tenants prioritizing flexibility in lease agreements first appeared on Visual Lease.]]> In early 2020, the COVID-19 pandemic redefined how businesses operate. Today, they continue to grapple with the ongoing effects of shutdowns, rent crises, supply chain issues and inflation. Many have rightfully turned toward re-evaluating their commercial real estate portfolios to ensure they still support their business needs.
  The post Article: Office market bouncing back, but tenants prioritizing flexibility in lease agreements first appeared on Visual Lease.]]> https://leverage.com/financing/reverse-build-to-suit/#new_tab Wed, 02 Mar 2022 14:02:37 +0000 https://visuallease.com/?p=6636 When discussing commercial real estate, you’ll often hear about build-to-suit (BTS) leases, in which the landowner agrees to construct a property according to the requirements of the lessee, and the lessee...
  The post Article: Is a Reverse Build-to-Suit Lease Right for You? first appeared on Visual Lease.]]> When discussing commercial real estate, you’ll often hear about build-to-suit (BTS) leases, in which the landowner agrees to construct a property according to the requirements of the lessee, and the lessee leases the property once construction is complete. With a BTS lease, the landowner is in charge of construction and financing.
  The post Article: Is a Reverse Build-to-Suit Lease Right for You? first appeared on Visual Lease.]]> https://visuallease.com/gasb-96-what-you-need-to-know/ Tue, 15 Feb 2022 21:35:31 +0000 https://visuallease.com/?p=6615

  

  Table of Contents

  • What is GASB 96?
  • Who does GASB 96 apply to?
  • What is a SBITA under GASB 96?
  • What is an Example of a SBITA?
  • What contracts are exempt under GASB 96?
  • What are short-term SBITAs?
  • How to recognize and measure an SBITA?
  • What Are the Footnote Disclosure Requirements for a SBITA?
  • What are the stages of SBITA?
  • What is a subscription asset?
  • What is a subscription liability?
  • What are the outlays under GASB 96?
  • What are the disclosure requirements under GASB 96?

  What is GASB 96?

  In May of 2020, the Governmental Accounting Standards Board, or GASB, finalized how SBITAs are recorded on financial statements through the issuance of GASB Statement No. 96.

  GASB 96 requires all covered organizations or governmental entities to record a right-to-use subscription intangible asset and corresponding subscription liability. The standard also provides guidance in accounting for cash outlays such as implementation fees, related to SBITAs to prevent future disparities in how government entities report on non-subscription costs.

  Who does GASB 96 apply to?

  GASB 96 applies to all public sector entities that follow Generally Accepted Accounting Principles (GAAP) in filing their annual financial statements, including state and local governments, school districts and public higher ed institutions.

  What is a Subscription-Based Information Technology Arrangement (SBITA) under GASB 96?

  Issued by the Governmental Accounting Standards Board, GASB 96 defines Subscription-Based Information Technology Arrangements (SBITAs) and provides guidance on accounting and financial reporting for government entities. The statement was created to regulate the accounting and disclosure around subscription-based payments for cloud-based software agreements.

  Under GASB 96, a SBITA is a contract that conveys control of the right to use another party’s (a SBITA vendor’s) IT software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction.

  For GASB 96 to be directly applicable, the organization must first determine that the contract is a SBITA. A crucial component in defining the subscription terms is the element of control over the underlying IT assets. An assessment must be made, and specific stipulations are required in understanding what rights your organization has regarding the present service capacity. Once this distinction is made, excluding certain exemptions, the subscription term is the noncancellable period of time that the government has the right to use the underlying IT asset.

  What is an Example of a SBITA?

  An example of a SBITA is a subscription-based software service, such as Software as a Service (SaaS) platforms. Some specific examples include Salesforce, Microsoft Teams, and Dropbox. These arrangements involve a contract between a government entity and another party, granting the right to use IT software for a period of time in exchange for a fee.

  What contracts are exempt under GASB 96?

  GASB 96 excludes contracts that only provide IT support services, but includes contracts providing IT support services in conjunction with the right to use a related IT asset. The following are also exempt from the scope of GASB 96:

  • Standalone IT services contracts that do not include the right to use an underlying IT asset
  • Agreements providing outside entities the right to use their own IT software and associated assets through an SBITA
  • Contracts that meet the definition of a lease under GASB 87, Leases
  • Contracts that fall under the scope of GASB 94, Public-Private and Public-Public Partnerships and availability Payment Arrangements
  • Contracts that fall under the scope of GASB 51, Accounting and Financial Reporting for Intangible Assets
  • Short-term SBITA contracts

  What are short-term SBITAs?

  GASB 96 provides exemptions for short-term SBITAs. Under GASB 96, a short-term SBITA has a maximum possible term of 12 months at the commencement of the subscription term. This includes any renewal or extension options regardless of whether the government is reasonably certain to exercise these options. The governmental entity is not required to recognize a subscription asset and liability for any short-term SBITA.

  How to recognize and measure an SBITA?

  If an SBITA is identified, government entities recognize a subscription liability and a subscription asset at the beginning of the subscription term of the SBITA, which occurs when the government entity obtains control of the right to use the underlying IT asset.

  The subscription term is the period that the government has the noncancellable right to use the underlying IT assets, plus the following periods, if applicable:

  • Periods covered by a government’s extension option if it is reasonably certain that the government will exercise that option
  • Periods covered by a government’s termination option if it is reasonably certain that the government will not exercise that option
  • Periods covered by a vendor’s extension option if it is reasonably certain that the SBITA vendor will exercise that option
  • Periods covered by a vendor’s termination option if it is reasonably certain that the vendor will not exercise that option

  What Are the Footnote Disclosure Requirements for a SBITA?

  • Description of the SBITA: This should include the basis, terms, and conditions on which variable payments are not included in the measurement of the subscription liability.
  • Sum of subscription-based assets and related accumulated amortization: This should be disclosed separately from other capital assets.
  • Outflow of resources recognized in the reporting period: This should include variable payments not previously included in the measurement of the subscription liability, as well as other payments such as termination penalties.
  • Principal and interest requirements to maturity: This should be presented separately for the subscription liability for each of the five subsequent fiscal years and in five-year increments thereafter.
  • Details of SBITAs that have been committed but not yet commenced: This should include the basis, terms, and conditions of the arrangement, as well as the estimated amount of the subscription liability.
  • Components of any loss associated with an impairment: This should include the amount of the loss, as well as the factors that contributed to the impairment.
  • Balance restatement details for the fiscal year 2023 only: This should include the reason for the restatement, as well as the impact on the financial statements.

  What are the stages of SBITA?

  The amortization of the subscription asset should be recognized as an outflow of resources over the term of the subscription. Activities associated with a SBITA are grouped into stages:

  Stage
  Preliminary project
  Initial implementation
  Operation and additional implementation

  Activities
  The decision to obtain technology
  Design, configure, code, test, and install
  Maintenance, troubleshooting, ongoing access

  Cost treatment
  Expensed as incurred
  Capitalized
  Capitalized or expensed as incurred

  • Preliminary project stage: This stage includes activities associated with an entity’s decision to obtain the technology provided by the SBITA. Any cost incurred in the preliminary project stage will be expensed as incurred.
  • Initial implementation stage: This stage includes activities related to designing, configuring, coding, testing, and installing the subscription assets. These charges are capitalized as part of the subscription asset.
  • Operation and additional implementation stage: This stage includes activities that relate to maintenance, troubleshooting, and other activities associated with ongoing access to the underlying IT assets. Activities in this stage may be capitalized as part of the subscription asset.

  What is a subscription asset?

  In addition to the subscription liability, the government must recognize a subscription under GASB 96. The subscription asset is measured as the initial value of the subscription liability plus:

  • Payments made to the vendor at the commencement of the subscription term
  • Capitalizable initial implementation costs
  • Minus any vendor incentives received at the commencement of the subscription term

  The government entity will need to amortize the subscription asset systematically and rationally over the shorter of the subscription term or the useful life of the underlying IT asset. Amortization of the subscription asset begins at the commencement of the subscription term and is reported as an outflow of resources by the governmental entity.

  What is a subscription liability?

  The initial subscription liability is measured as the present value of the total subscription payments expected to be made to the vendor during the subscription term. The total future payments are discounted using the interest rate the vendor charges the government, which may be the interest rate implicit in the SBITA. If the implicit interest rate is not readily determinable, the government may use an estimated incremental borrowing rate for the present value calculation.

  GASB 96 outlines that the payments included in the present value calculation of the subscription liability should include the following:

  • Fixed payments
  • Variable payments based on an index or a rate, measured using the index or rate as of the commencement of the subscription term
  • Variable payments that are fixed in substance
  • Termination penalties, if the subscription term reflects the government exercising either an option to terminate the agreement or a fiscal funding or cancellation clause
  • Incentives receivable from the vendor
  • Other payments the government is reasonably certain will be required to be made to the vendor

  In subsequent periods, the government will accrue interest on the remaining subscription liability at the applicable discount rate. The subscription payments will be allocated first to the accrued interest, and then to reduce the outstanding subscription liability.

  What are the outlays under GASB 96?

  There may be cash outlays for other activities associated with SBITAs under GASB 96. The type and timing of the activity dictates the accounting treatment of these cash outlays; other activities associated with SBITAs are grouped into three stages:

  1.Preliminary project stage

  The preliminary project stage includes costs associated with activities such as evaluating alternatives, determining needed technology, and selecting an SBITA vendor. Outlays in this stage should be expensed as incurred.

  2.Initial implementation stage

  The initial implementation stage includes all ancillary charges necessary to place the subscription asset into service. Outlays in this stage generally should be capitalized as an addition to the subscription asset.

  3.Operation and additional implementation stage

  The operation and additional implementation stage, includes activities such as subsequent implementation activities, maintenance, and other activities for ongoing operations related to a SBITA. Outlays in this stage should be expensed as incurred unless they meet specific capitalization criteria.

  What are the disclosure requirements under GASB 96?

  A government entity should disclose the following information about its SBITAs (which may be grouped for purposes of disclosure) in notes to financial statements:

  1. A general description of its SBITAs, including the basis, terms, and conditions on which variable payments not included in the measurement of the subscription liability are determined
  2. The total amount of subscription assets, and the related accumulated amortization, disclosed separately from other capital assets
  3. The amount of outflows of resources recognized in the reporting period for variable payments not previously included in the measurement of the subscription liability
  4. The amount of outflows of resources recognized in the reporting period for other payments, such as termination penalties, not previously included in the measurement of the subscription liability
  5. Principal and interest requirements to maturity, presented separately, for the subscription liability for each of the five subsequent fiscal years and in five-year increments thereafter
  6. Commitments under SBITAs before the commencement of the subscription term
  7. The components of any loss associated with an impairment

  Ready for GASB 96

  Meeting the compliance standards for GASB 96 requires consistency, accuracy and the collection of your portfolio data — specifically information surrounding SBITAs. At the same time, evaluating accounting software solutions will allow you to implement a solution that will allow you to meet the standards outlined in GASB 96.

  The post GASB 96: What You Need to Know first appeared on Visual Lease.]]> https://www.globest.com/2022/02/04/finance-short-term-leases-complicate-underwriting/#new_tab Tue, 08 Feb 2022 17:37:33 +0000 https://visuallease.com/?p=6607 As lease terms shorten, the value of properties becomes more uncertain. If the pandemic has infused business with any one idea, it’s flexibility. Companies need to be flexible to get...
  The post Article: Short-Term Leases Complicate Underwriting first appeared on Visual Lease.]]> As lease terms shorten, the value of properties becomes more uncertain. If the pandemic has infused business with any one idea, it’s flexibility. Companies need to be flexible to get work done. Employees want flexibility to work but also be safe and manage personal and family obligations.
  The post Article: Short-Term Leases Complicate Underwriting first appeared on Visual Lease.]]> https://visuallease.com/how-to-apply-the-asc-842-discount-rate-update-for-private-companies-and-nonprofits/ Tue, 25 Jan 2022 15:48:10 +0000 https://visuallease.com/?p=6595 The Financial Accounting Standards Board (FASB) recently issued an update to ASC 842 that addresses complexities associated with discount rate calculations. In this blog, we share how this update affects private...
  The post How to Apply the ASC 842 Discount Rate Update for
  Private Companies and Nonprofits first appeared on Visual Lease.]]>

  The Financial Accounting Standards Board (FASB) recently issued an update to ASC 842 that addresses complexities associated with discount rate calculations. In this blog, we share how this update affects private companies and nonprofits.       

  What does the discount rate update mean for private companies? 

  The update to ASC 842 simplifies the way private companies, nonprofit organizations and employee benefit plans are required to determine the present value of lease payments. Under the new update, these businesses can elect risk-free rates by class of underlying asset, rather than at the entity wide level.  

  This update replaces the previous rules within ASC 842 for how private companies and nonprofits handled discount rates to comply with the lease accounting standard.  

   Why was the discount rate update proposed? 

  Prior to the update, companies ran into similar challenges when determining the discount rate and present value of lease payments. They had to use the rate implicit in the lease to calculate the right of use (ROU) asset and lease liability. However, the rate implicit in the lease isn’t always accessible. 

  Given the difficulties private companies were experiencing, FASB recognized a need to streamline calculation guidance – and in response, proposed and issued this discount rate update.  

   How do private companies apply the new discount rate guidance? 

  Organizations may now make a policy election to use a risk-free rate as the discount rate for all leases. This calculation is much easier to run, which helps businesses save time and lowers the impact on the balance sheet.  

   Are you set up to account for lease accounting guidance updates? 

  The discount rate update issued by FASB to ASC 842 is just one example of why private companies and nonprofit organizations can benefit from lease accounting technology. Beyond providing lease accounting automation, ASC 842 software like Visual Lease is equipped to seamlessly adapt to changes to the lease accounting standards or a lease portfolio.  

  It can also streamline your lease accounting process by automatically generating audit-ready journal entries, disclosures and reports that you need to achieve and sustain compliance.  

  Additionally, the right solution will provide you with the visibility you need to thoroughly understand your lease data and use that information to make better informed operational decisions.  

  Interested in learning more? See how lease accounting software like Visual Lease can help. 

   

  The post How to Apply the ASC 842 Discount Rate Update for
  Private Companies and Nonprofits first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-reports-a-strong-close-to-2021/ Thu, 20 Jan 2022 14:27:29 +0000 https://visuallease.com/?p=6588 Company achieves double-digit YoY annual recurring revenue and customer growth  for fourth consecutive year  Woodbridge, NJ – January 20, 2022 — Visual Lease, the #1 lease optimization software provider, today...
  The post Visual Lease Reports a Strong Close to 2021 first appeared on Visual Lease.]]>

  Company achieves double-digit YoY annual recurring revenue and customer growth  
  for fourth consecutive year 

  Woodbridge, NJ – January 20, 2022 — Visual Lease, the #1 lease optimization software provider, today announced results from 2021, reporting an increase of nearly 30% in customer count and annual recurring revenue year-over-year, making it the fourth consecutive year that the company has experienced double-digit growth. Visual Lease now assists nearly 1,000 organizations with lease accounting compliance and the financial, legal and operational performance of their leased assets.  

  “Our continued success is grounded in our commitment to our customers,” said founder and CEO, Marc Betesh. “Our software is designed to help companies not only master lease accounting compliance, but also effectively manage their leased assets for maximum return on investment. Our platform supports cross-functional collaboration across all teams who handle lease data, a critical part of the lease accounting and management process that will drive business impact today and well into the future. As we move further into 2022, we’re building on a very strong foundation, and will continue to make strategic investments in our product, services, people and infrastructure.”    

  Some of the company’s other achievements in 2021 included: 

  Solution Advancements 

  Lease Accounting 

  • Expanded its GASB support, launching technical accounting features to streamline the handling of lessor termination calculations, schedule modifications and reports. 
  • Introduced GASB 87 Complete and ASC 842 Proven Path, which are end-to-end lease accounting solutions and services packages for public sector entities and private companies with fewer than 100 leases.  
  • Introduced a GASB RFP Template, a free, comprehensive RFP template to assist organizations in the evaluation of lease accounting technology providers. 
  • Enhanced its most frequently used reports (Ad Hoc, Roll-Forward, Disclosure and Lease Accounting reports), which resulted in greater visibility into calculations, supporting audit-readiness. 
  • Launched short-term calculations, empowering its users to easily create short-term calculations irrespective of lease terms. 
  • Improved the process around financial entries when importing calculations and transaction values. 
  • Expanded support of foreign currency disclosure and reporting, increasing visibility into calculations to assist with audits. 

  Lease Administration 

  • Released a new Lease Options Report, providing an easy-to-read summary of critical options information and empowering its users to act based on key details within their portfolio. 
  • Announced a new Schedule Upload feature, enabling its users to quickly generate abandonment schedules with itemized interest and amortization entries. 
  • Expanded the VL Integrations Hub with a broader set of APIs, export and integrations options that allow users to streamline their processes and improve productivity by automating repetitive tasks. 
  • Increased support with lease abandonment, a critical capability for many organizations dealing with the ongoing impacts of COVID-19 and the many resulting changes within their lease portfolio.  

  Infrastructure & Community 

  • Celebrated its 25th anniversary and as part of it donated $25,000 to three non-profit organizations addressing affordable housing needs: Habitat for Humanity International, The Affordable Housing Alliance and New Jersey Veterans Home at Menlo Park. 
  • Introduced its Customer Advisory Board (CAB), assembling a select group of senior financial management and real estate executives from its customer base to share insights and solicit feedback on its solutions and services. 
  • Doubled its Partner Alliance network, joining forces with a number of industry-leading organizations such as SolomonEdwards and CGFI, providing increasingly valuable service and offerings to mutual customers.  
  • Hired across all departments, increasing its employee base by 38% year over year. 
  • Launched its Corporate Strategy Department to gather information and harness market insights to determine a greater, forward-looking solution for its customers.  

  Brand & Thought Leadership 

  • Unveiled new branding, elevating its look and feel to mirror its ingenuity, passion and commitment to helping companies achieve confident, ongoing lease accounting compliance.  
  • Announced its Consult an Expert program, providing companies with direct access to its deep bench of accounting professionals and lease specialists. 
  • Launched The Visual Lease Data Institute, publishing two reports, “The Road to Readiness for ASC 842” and “Commercial Real Estate in 2022.”  
  • Introduced its Lease Accounting Monthly Planning Workshops webinar series, providing companies with unique insight and resources to help successfully take the steps needed to transition to ASC 842 and GASB 87. 
  • Launched its Lease Accounting Solution Transition (LAST) PlannerTM, an interactive and easy-to-use tool that provides organizations with a custom plan to facilitate their move from one lease accounting platform to another. 

  Industry Recognitions 

  • Ranked in the Top 20% on the Inc. 5000 List and included in the Deloitte Fast 500 for the second consecutive year. 
  • Honored with a Bronze Stevie® Award in the Fastest Growing Company of the Year category in The 19th Annual American Business Awards®. 
  • Named a winner of a Gold Stevie® Award in the Employer of the Year category in the sixth annual Stevie Awards for Great Employers. 
  • Identified as a Top Software Company of 2021 by The Software Report. 
  • Included in the Capterra Shortlist for Lease Management, identified as a top lease management tool of 2021. 
  • Recognized by G2 as the only leasing solution that is a Leader in both Lease Accounting and Lease Administration. 
  • Placed in a new Gartner Digital Markets report for FrontRunners Online Property Management Software. 
  • Named a Best Place to Work in New Jersey by NJBIZ. 
  • Recognized as a Top Workplace in 2021 by NJ.com. 

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom. 

  About Visual Lease  

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by nearly 1,000 organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.   

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com     

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com  

   

  The post Visual Lease Reports a Strong Close to 2021 first appeared on Visual Lease.]]> https://www.finextra.com/blogposting/21558/top-lease-accounting-software-to-address-complex-recording-and-reporting-requirements#new_tab Thu, 13 Jan 2022 01:04:15 +0000 https://visuallease.com/?p=6586 Lease accounting can easily become an administrative and logistical nightmare for many. Companies tend to underestimate the work involved in preparing documents that comply with FASB and other standards. Proper...
  The post Article: Top Lease Accounting Software to Address Complex Recording and Reporting Requirements first appeared on Visual Lease.]]> Lease accounting can easily become an administrative and logistical nightmare for many. Companies tend to underestimate the work involved in preparing documents that comply with FASB and other standards. Proper revenue recognition and reporting are particularly difficult for many organizations, and there are also those who do not even know where their lease contracts are.
  The post Article: Top Lease Accounting Software to Address Complex Recording and Reporting Requirements first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-unveils-q1-educational-webinar-schedule/ Tue, 11 Jan 2022 14:39:58 +0000 https://visuallease.com/?p=6581 Industry leader to host a series of virtual events, sharing valuable insights to help companies master lease accounting compliance  Woodbridge, NJ – January 11, 2022 —Visual Lease, the #1 lease optimization software...
  The post Visual Lease Unveils Q1 Educational Webinar Schedule first appeared on Visual Lease.]]>

  Industry leader to host a series of virtual events, sharing valuable insights to help companies master lease accounting compliance 

  Woodbridge, NJ – January 11, 2022 —Visual Lease, the #1 lease optimization software provider, announced its schedule for complimentary educational webinars for the first quarter of 2022. The organization will continue to leverage its three decades of lease management and accounting expertise to provide organizations with the information they require to achieve and maintain compliance with lease accounting standards ASC 842, GASB 87 and IFRS 16.  

   “These educational sessions not only provide attendees with lease accounting best practices, but also, with insight into the risks and opportunities associated with their leases.” said Marc Betesh, founder and CEO of Visual Lease. “With looming deadlines and changing requirements, there’s never been a better time for organizations to learn directly from industry experts who have helped inform the very lease accounting standards by which they’re impacted.” 

   Visual Lease’s Q1 webinar schedule covers the following topics: 

  • Achieving Confident Compliance
  • • ASC 842 Monthly Planning Sessions (January 19th, February 15th and March 15th) – Receive expert tips and industry best practices to accelerate and maintain compliance with ASC 842.  
    • GASB 87 Monthly Planning Sessions (January 19th, February 17th, March 17th) – Learn how to prepare for and execute the transition to GASB 87 with supporting lease accounting technology.   
    • Best Practices for Properly Gathering Lease Data (March 22nd) – Gain an understanding of how to successfully navigate and gather your company’s lease data to ensure lease accounting compliance and audit readiness.  
  • Sustaining Compliance 
  • • How to Prepare for Common Day 2 Lease Accounting Challenges (February 10th) – Hear directly from experienced technical accountants about different Day 2 lease accounting challenges, including remeasurements, modifications and terminations. 
  • Lease Optimization
  • • Maximize the Value of your Commercial Real Estate in 2022 (January 20th) – Discover new commercial real estate trends from a recent study by The Visual Lease Data Institute. Learn how to leverage these insights to maximize the value of future leases.    

  For additional details, registration information and updates on opportunities to earn CPE credits please visit Visual Lease’s events page, which will be regularly updated.

  About Visual Lease  

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 900+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.   

    
  Media Contacts 

  Erica Bonavitacola 
  Visual Lease 
  T+1 732 860 4838 
  ebonavitacola@visuallease.com     
   
  Katie Vroom 
  Gregory FCA 
  T+1 212 398 9680 
  kvroom@gregoryfca.com  
   
  

  The post Visual Lease Unveils Q1 Educational Webinar Schedule first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-appoints-guy-zerega-as-chief-revenue-officer/ Thu, 06 Jan 2022 14:41:41 +0000 https://visuallease.com/?p=6550 Company continues to prepare for its next phase of growth Woodbridge, NJ – January 6, 2022 — Visual Lease, the #1 lease optimization software provider, today announced that Guy Zerega,...
  The post Visual Lease Appoints Guy Zerega as Chief Revenue Officer first appeared on Visual Lease.]]>

  Company continues to prepare for its next phase of growth

  Woodbridge, NJ – January 6, 2022 — Visual Lease, the #1 lease optimization software provider, today announced that Guy Zerega, Senior Vice President of Sales, will advance to become the organization’s first Chief Revenue Officer. In his new role, Zerega will continue to oversee the company’s Sales, Account Management and Alliance Partner teams.  

  “When Guy first joined our company in June 2021, it was the perfect time to bring on an experienced sales leader,” said Visual Lease’s founder and CEO, Marc Betesh. “Organizations across all industries are becoming increasingly aware of the risks and opportunities associated with their lease portfolios. As a result, the demand for our software is growing, and Guy’s leadership will be instrumental in our ability to continue to meet that demand.”

  Before joining Visual Lease, Guy worked at Veriff where he managed their global sales organization and business expansion. During his tenure, he helped the company receive the largest Series B investment in the identity verification space to date. Prior to his time at Veriff, Guy served as Executive Vice President of Revenue at Stack Overflow where he grew their revenue organization from three to more than 130 people. 

  “Throughout my career, I’ve had the opportunity to help scale revenue organizations from the ground up,” said Zerega. “I was drawn to Visual Lease because of its unique position. Having been around for 25 years, it is a clear market leader with a very solid foundation. As more organizations prepare to transition to the new lease accounting standards, they will look to adopt the required technology. I’m looking forward to helping Visual Lease continue on its path as the software partner of choice for lease accounting, management and optimization.” 

  In 2021, Visual Lease further strengthened its leadership team with the appointment of Erinn Tarpey as Chief Marketing Officer and Alexandra Betesh as Senior Vice President of Corporate Strategy.

  Visit Visual Lease’s career site to learn more about career opportunities.

  About Visual Lease  

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 900+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.   

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com     

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com  

  The post Visual Lease Appoints Guy Zerega as Chief Revenue Officer first appeared on Visual Lease.]]> https://www.accountingtoday.com/news/easing-the-pain-of-lease-accounting#new_tab Thu, 06 Jan 2022 11:50:21 +0000 https://visuallease.com/?p=6584 Chances are you’ve already tangled with the ASC 842/IFRS 16 changes in standards determining how organizations should be accounting for leases on the balance sheet. The effective date for implementing...
  The post Article: Easing the pain of lease accounting first appeared on Visual Lease.]]> Chances are you’ve already tangled with the ASC 842/IFRS 16 changes in standards determining how organizations should be accounting for leases on the balance sheet. The effective date for implementing these standards for public companies started for fiscal years beginning after Dec. 15, 2018. But that was just the first salvo. After a couple of delays, private companies were subject to the same new standard beginning with fiscal years starting after Dec. 15, 2021. And that’s now!
  The post Article: Easing the pain of lease accounting first appeared on Visual Lease.]]> https://tax.thomsonreuters.com/news/top-5-issues-to-master-to-adopt-fasb-lease-accounting-rules-this-year/#new_tab Tue, 04 Jan 2022 16:57:18 +0000 https://visuallease.com/?p=6543 Private companies, the largest business demographic in the U.S., have to adopt the FASB’s new lease accounting standard starting this month, but many are still lagging in those efforts.
  The post Article: Top 5 Issues to Master to Adopt FASB Lease Accounting Rules This Year first appeared on Visual Lease.]]> Private companies, the largest business demographic in the U.S., have to adopt the FASB’s new lease accounting standard starting this month, but many are still lagging in those efforts.
  The post Article: Top 5 Issues to Master to Adopt FASB Lease Accounting Rules This Year first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbestechcouncil/2021/12/28/what-to-look-for-in-lease-accounting-technology-in-2022/?sh=7b387c733753#new_tab Thu, 30 Dec 2021 18:59:29 +0000 https://visuallease.com/?p=6540 The ongoing impacts of Covid-19 are greatly changing leasing life cycles and accounting workflows. This pressure, coupled with the new lease accounting standards and looming compliance deadlines, is pushing financial...
  The post Article: What To Look For In Lease Accounting Technology In 2022 first appeared on Visual Lease.]]> The ongoing impacts of Covid-19 are greatly changing leasing life cycles and accounting workflows. This pressure, coupled with the new lease accounting standards and looming compliance deadlines, is pushing financial leaders across all industries to reevaluate how they’re managing their leases.
  The post Article: What To Look For In Lease Accounting Technology In 2022 first appeared on Visual Lease.]]> https://visuallease.com/is-lease-capitalization-required-for-all-operating-leases-under-asc-842/ Thu, 30 Dec 2021 18:55:03 +0000 https://visuallease.com/?p=6538 What is lease capitalization? Lease capitalization is the act of recording Right-of-Use Assets and related lease obligations on a company’s balance sheet, as required for the lease accounting standard ASC...
  The post Is lease capitalization required for all operating leases
  under ASC 842? first appeared on Visual Lease.]]>

  What is lease capitalization?

  Lease capitalization is the act of recording Right-of-Use Assets and related lease obligations on a company’s balance sheet, as required for the lease accounting standard ASC 842.

  Placing these operating lease liabilities on the balance sheet can have a significant impact on a business’ financial position – potentially affecting credit rating and debt covenants under its corporate borrowings.

  What is the importance of lease capitalization under ASC 842?

  With the new lease accounting standard, there is an emphasis on accuracy, comprehensiveness and transparency as to what is accounted for in a company’s balance sheet. The new lease accounting standard emphasizes accuracy, comprehensiveness and transparency of a company’s balance sheet.

  It’s common for business’ stakeholders – such as a public company’s shareholders or a privately held company’s bank or private lender – to want to understand the financial health of the business they have invested in and/or provided financing.

  As a result of ASC 842, a company’s audited financial statements now have a more accurate representation of the company’s overall financial health.

  Which leases are under ASC 842?

  Prior to ASC 842, operating leases were not captured on the balance sheet. However, under ASC 842, both operating leases and finance leases (formerly known as capital leases) need to be included on the balance sheet (in our Complete Guide to Lease Accounting, we share how operating and finance leases are capitalized and accounted for).

  To identify whether a lease is classified as a finance lease or operating lease under ASC 842, check out our blog on Capital Lease Accounting for ASC 840 and ASC 842.

  There are some exceptions to capitalization under ASC 842, such as the ability to not capitalize short-term leases (leases of 12 months or less). To see a further breakdown and examples, take a look at our blog on Balance Sheet Changes for ASC 842.

  ASC 842 requires businesses to disclose much more detail about their lease portfolios. If your company has a high volume of leases (100 or more), and/or manages complex leases (like real estate), it is impossible to keep track of them without leveraging lease accounting software.

  Leases are incredibly dynamic – changing constantly as companies renegotiate their lease terms. And each of these lease modifications needs to be examined and potentially accounted for under the new lease accounting standards. Lease capitalization has been restructured and needs to be accurately accounted for on the balance sheet – one of the many elements associated with the new lease accounting standards. It’s important to not only understand the rules but make sure your company utilizes the right software to get and stay compliant.

   

   

  The post Is lease capitalization required for all operating leases
  under ASC 842? first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesbusinesscouncil/2021/12/13/12-big-tech-challenges-remote-real-estate-companies-are-facing-right-now/?sh=5ba2e78a40c3#new_tab Tue, 14 Dec 2021 19:29:23 +0000 https://visuallease.com/?p=6522 Adopting new technology has become the reality of every business, especially in the modern remote work era. Companies that shifted to a work-from-home environment during the pandemic had to train...
  The post Article: 12 Big Tech Challenges Remote Real Estate Companies Are Facing Right Now first appeared on Visual Lease.]]> Adopting new technology has become the reality of every business, especially in the modern remote work era. Companies that shifted to a work-from-home environment during the pandemic had to train employees on the usage of new digital tools and establish remote work policies that hadn’t previously been put into practice.
  The post Article: 12 Big Tech Challenges Remote Real Estate Companies Are Facing Right Now first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesfinancecouncil/2021/12/10/four-predictions-for-lease-accounting-in-2022/?sh=ce6919467e41#new_tab Mon, 13 Dec 2021 23:37:48 +0000 https://visuallease.com/?p=6517 New lease accounting standards coupled with the many pressures brought on by the pandemic have changed how organizations prioritize their leases. Companies are currently reevaluating their lease portfolios to ensure...
  The post Article: Four Predictions For Lease Accounting In 2022 first appeared on Visual Lease.]]> New lease accounting standards coupled with the many pressures brought on by the pandemic have changed how organizations prioritize their leases.

  Companies are currently reevaluating their lease portfolios to ensure these costly agreements still make sense in light of their new business goals and operations. As a result, many of these same organizations are making modifications to existing leases or are considering different options and/or terms for new agreements.

  The post Article: Four Predictions For Lease Accounting In 2022 first appeared on Visual Lease.]]> https://www.globest.com/2021/12/07/2022-commercial-real-estate-vision/?kw=2022%20Commercial%20Real%20Estate%20Vision&utm_source=email&utm_medium=enl&utm_campaign=nationalamalert&utm_content=20211207&utm_term=rem&enlcmp=nltrplt4#new_tab Mon, 13 Dec 2021 23:35:22 +0000 https://visuallease.com/?p=6515 You’d be forgiven for gaining a case of whiplash moving from 2020 to 2021. Disaster—a seemingly closed economy, crashed supply chains, tight labor availability, and many millions out of work—turned...
  The post Article: 2022 Commercial Real Estate Vision first appeared on Visual Lease.]]> You’d be forgiven for gaining a case of whiplash moving from 2020 to 2021. Disaster—a seemingly closed economy, crashed supply chains, tight labor availability, and many millions out of work—turned into rising values, some hot sectors, and rising rents and increased stability by 2021.

  Stepping into 2022 should be a good deal less jarring. And yet, there might be changes and surprises. Here’s what experts see as coming up.

  The post Article: 2022 Commercial Real Estate Vision first appeared on Visual Lease.]]> https://www.corporatecomplianceinsights.com/fasb-lease-accounting-standard-asc-842-deadline-approaching/#new_tab Fri, 10 Dec 2021 19:15:22 +0000 https://visuallease.com/?p=6507 The verdict is in: the Financial Accounting Standards Board (FASB) will not issue a third delay to the ASC 842 effective date for private companies, which will take effect Dec. 15, 2021....
  The post Article: FASB Lease Accounting Standard ASC 842 Deadline Is Rapidly Approaching. Here’s How to Accelerate Adoption. first appeared on Visual Lease.]]>

  The verdict is in: the Financial Accounting Standards Board (FASB) will not issue a third delay to the ASC 842 effective date for private companies, which will take effect Dec. 15, 2021. This means many firms may be flat-footed when the new standards go into effect.

  If you thought you would have had more time to prepare for the new lease accounting standard, you’re not alone. As of late July 2021, 75 percent of surveyed senior accounting and finance professionals at private companies with more than 1,000 employees said they were not yet compliant with ASC 842, with 30 percent less than halfway through the process. Furthermore, 40 percent claimed they were only somewhat confident about their ability to successfully adopt the new standard in time for their next scheduled reporting period after Dec. 15. This data indicates that many private companies were, indeed, waiting for another extension.

  The post Article: FASB Lease Accounting Standard ASC 842 Deadline Is Rapidly Approaching. Here’s How to Accelerate Adoption. first appeared on Visual Lease.]]> https://www.bisnow.com/new-york/news/office/manhattan-office-market-scores-more-than-3m-sf-in-leases-marking-best-month-since-before-the-pandemic-111119#:~:text=Recovery%20Watch%3A%20Manhattan%20Office%20Landlords%20Have%20Best%20Month%20Since%20January%202020,-New%20York%20Office&text=In%20a%20piece%20of%20good,eclipsed%20the%203M%20SF%20mark#new_tab Mon, 06 Dec 2021 20:17:17 +0000 https://visuallease.com/?p=6505 In a piece of good news for Manhattan’s battered office market, over 3M SF of office space was leased in November — the first time since before the coronavirus pandemic...
  The post Article: Manhattan Office Landlords Have Best Month Since January 2020 first appeared on Visual Lease.]]>

  In a piece of good news for Manhattan’s battered office market, over 3M SF of office space was leased in November — the first time since before the coronavirus pandemic the nation’s largest office market eclipsed the 3M SF mark.

  A total of 3.09M SF was rented last month, according to Colliers’ monthly snapshot. That was the highest monthly leasing total since January 2020, when 3.6M SF of office leases were signed just before the pandemic hit the city and brought activity to a sudden halt.

  The post Article: Manhattan Office Landlords Have Best Month Since January 2020 first appeared on Visual Lease.]]> https://nam02.safelinks.protection.outlook.com/?url=http%3A%2F%2Fcheckpoint.riag.com%2Fapp%2Ffind%3FlinkType%3DQuery%26Query%3D%3DAFRADOC%3AUID%3D%2522DL111221-2%2522%2BOR%2B%3DPAR%3AN%3D%2522DL111221-2%2522%26nlEmailId%3DArt-AFRA-211112&data=04%7C01%7CBarbaraDenise.Lugo%40thomsonreuters.com%7C372225dec89b4c7042fd08d9a5caec19%7C62ccb8646a1a4b5d8e1c397dec1a8258%7C0%7C0%7C637723113230669021%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=LoRtteKT4A360g9dxXZUMjymUsDd9Neu%2FTMSYOTAUFQ%3D&reserved=0#new_tab Tue, 23 Nov 2021 21:33:39 +0000 https://visuallease.com/?p=6494 The FASB on November 11, 2021, published a narrow amendment to ease lease accounting rules for private companies and nonprofits, enabling lessees to have a moreflexible way to elect a...
  The post Article: FASB Amends Lease Accounting Rules to Ease Discount Rate Election first appeared on Visual Lease.]]> The FASB on November 11, 2021, published a narrow amendment to ease lease accounting rules for private companies and nonprofits, enabling lessees to have a moreflexible way to elect a discount rate to measure leases that must be recorded on the balance sheet. A lessee can elect to use either an incremental borrowing rate or a risk-free rate. Therate can impact the balance sheet depending on the type of lease.
  The post Article: FASB Amends Lease Accounting Rules to Ease Discount Rate Election first appeared on Visual Lease.]]> https://www.genehammett.com/814-culture-is-the-personality-of-the-company-with-marc-betesh-at-visual-lease/#new_tab Mon, 22 Nov 2021 17:45:41 +0000 https://visuallease.com/?p=6487 Culture is more than a business buzzword. Discover how you can improve the personality of the company in this interview. Today’s guest is Marc Betesh, CEO and Founder at Visual...
  The post Culture is the Personality of the Company with Marc Betesh at Visual Lease first appeared on Visual Lease.]]> Culture is more than a business buzzword. Discover how you can improve the personality of the company in this interview. Today’s guest is Marc Betesh, CEO and Founder at Visual Lease. Inc Magazine ranked his company #941 on the 2021 Inc 5000 list. Visual Lease brings together powerful tools and expert services to help you handle complex scenarios and take advantage of every opportunity. Marc gives us why he believes culture is the personality of the company. We look beyond the normal aspects of culture.
  The post Culture is the Personality of the Company with Marc Betesh at Visual Lease first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-included-in-deloitte-technology-fast-500-for-second-consecutive-year/ Thu, 18 Nov 2021 18:02:09 +0000 https://visuallease.com/?p=6477 Company sustains consistent double-digit growth over four years Woodbridge, NJ – November 18, 2021 — Visual Lease, the #1 lease optimization software provider, today announced that it ranked No. 264...
  The post Visual Lease Included in Deloitte Technology Fast 500™ for Second Consecutive Year first appeared on Visual Lease.]]>

  Company sustains consistent double-digit growth over four years

  Woodbridge, NJ – November 18, 2021 — Visual Lease, the #1 lease optimization software provider, today announced that it ranked No. 264 on the Deloitte Technology Fast 500, a list of the 500 fastest-growing technology, media, telecommunications, life sciences, fintech and energy tech companies in North America. Visual Lease’s revenue grew by 493% over a three-year period, from 2017 to 2020, and this is the company’s second consecutive year on the list.

  “This recognition is an honor and reflects just how pivotal of a time it is for our organization,” said Marc Betesh, founder and CEO of Visual Lease. “We realize that as companies face the pressures of the new lease accounting standards, as well as the ongoing impacts of the pandemic, it’s never been more important that they accurately track, manage and report on their leases. Our team remains dedicated to providing the software and services they require to successfully achieve and maintain lease accounting compliance. As a result, we have sustained our high growth, steadily increasing our revenue, our network of customers and partners and our employee base.”

  To be eligible for the Technology Fast 500 recognition, companies must own proprietary intellectual property or technology that is sold to customers in products that contribute to a majority of the company’s operating revenues. Companies must have base-year operating revenues of at least $50,000 US, and current-year operating revenues of at least $5 million US. Additionally, companies must be in business for a minimum of four years and be headquartered within North America.

  This recognition comes on the heels of a record-breaking third quarter for Visual Lease, during which the organization announced it now helps more than 800 organizations achieve lease accounting compliance and improve the financial, legal and operational performance of their leases.

  Earlier this year, Visual Lease was named a Best Place to Work in New Jersey by NJBIZ for the second year in a row. The business was also ranked in the top 20% of the 2021 Inc. 5000 list and among the Top 100 Software Companies of 2021 by The Software Report. The company was also honored with a Bronze Stevie® Award in the Fastest Growing Company of the Year category in The 19th Annual American Business Awards® and named a Top Workplace in New Jersey by NJ.com.

  To keep up with news from Visual Lease, visit its newsroom.

  For more information on Visual Lease’s open positions, visit its career site.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com

  The post Visual Lease Included in Deloitte Technology Fast 500™ for Second Consecutive Year first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-celebrates-25th-anniversary-by-giving-back/ Wed, 17 Nov 2021 15:01:37 +0000 https://visuallease.com/?p=6472 Company donates $25,000 to Habitat for Humanity International, The Affordable Housing Alliance and New Jersey Veterans Home at Menlo Park   Woodbridge, NJ – November 17, 2021 — Visual Lease,...
  The post Visual Lease Celebrates 25th Anniversary by Giving Back first appeared on Visual Lease.]]>

  Company donates $25,000 to Habitat for Humanity International, The Affordable Housing Alliance and New Jersey Veterans Home at Menlo Park

   

  Woodbridge, NJ – November 17, 2021 — Visual Lease, the #1 lease optimization software provider, today announced that it made $25,000 in charitable donations across three non-profit organizations that are addressing affordable housing needs: Habitat for Humanity International, The Affordable Housing Alliance and New Jersey Veterans Home at Menlo Park. The donation is in honor of Visual Lease’s 25^th anniversary.

  “Over the past 25 years, we have dedicated ourselves to providing the technology, service and expertise companies need to properly manage their leases, achieve and sustain lease accounting compliance and maintain full visibility into their portfolios,” said Marc Betesh, founder and CEO of Visual Lease. “We’ve reached this milestone because of the hard work of our talented, committed and growing team, as well as the support of our customers, partners and community.”

  Visual Lease is committed to supporting non-profit organizations that are dedicated to enriching our communities and providing opportunities for affordable housing to those in need.

  “We proudly take this opportunity to reflect and celebrate our success,” noted Betesh. “And also, give back to three organizations that benefit a cause that is so important to us.”

  Visual Lease chose to donate to two organizations local to its Woodbridge, New Jersey headquarters, The Affordable Housing Alliance and New Jersey Veterans Home at Menlo Park, in addition to one national organization, Habitat for Humanity International, as the company currently employs team members across 14 states.

  “Care is one of our six company values,” said Pamela Cosmillo, Director of Human Resources at Visual Lease. “Our team prides itself on being empathetic to the needs and circumstances of others, and so, it was only fitting that we celebrated this exciting milestone with a donation to organizations that embody this value.”

  For more information on Visual Lease’s culture and values, visit its career site.

  To keep up with news from Visual Lease, visit its newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com

   

  The post Visual Lease Celebrates 25th Anniversary by Giving Back first appeared on Visual Lease.]]> https://visuallease.com/no-further-delays-from-fasb-its-time-to-move-your-asc-842-lease-accounting-project-forward/ Mon, 15 Nov 2021 16:58:32 +0000 https://visuallease.com/?p=6465
  

  Joe Fitzgerald

  SVP of Lease Market Strategy
  Visual Lease

  On November 10, 2021, The Financial Accounting Standards Board (FASB) decided not to issue a third delay to the ASC 842 effective date for private companies. It was widely agreed that after two prior deferments, impacted organizations have had enough time to effectively prepare for their transition to the new standard.  

  The decision, however, came as a surprise to many private organizations that were, indeed, relying on the prospect of more time.  

  In late July 2021, we surveyed 500 senior accounting and finance professionals at private companies with more than 1,000 employees to understand where they were in their journeys toward complying with ASC 842.  

  Despite the deadline being mere months away, 75% of respondents stated they were not yet compliant with ASC 842, with 30% less than halfway through the process. Furthermore, 40% claimed they were only somewhat confident about their ability to successfully adopt the new standard in time for their next scheduled reporting period after December 15, 2021.  

  This data indicates that despite the many known risks associated with misreporting lease financials– including increased audit fees (51%), damage to an organization’s reputation (49%) and risk of legal action (48%) – private companies have largely underestimated the time and resources required to navigate this complex process, likely banking on yet another extension from FASB.  

  However, last week’s FASB session made it clear that despite private companies being largely underprepared and underconfident in their ability to adopt ASC 842, the sand has run out of that hourglass. 

  In addition to dealing with the pressures of meeting the confirmed deadline of December 2021, private companies are simultaneously evolving how they prioritize and manage their commercial real estate leases to accommodate new business needs. To effectively make changes and then measure their impact, they require easy access to their lease agreements.  

  What many of these same companies fail to realize is that they can leverage their lease accounting compliance project to gain a better overall visibility into their lease portfolio.  

  With the right technology and personnel in place, organizations can effectively achieve and sustain lease accounting compliance, and go one step further to maximize the value of their leases. However, there is one major caveat, and that’s time.  

  Private companies cannot spare another moment – leases are dynamic agreements, and the rules surrounding the already complicated standard are ever-changing. Impacted companies must act now to ensure they mitigate the risks and capitalize on the benefits associated with managing and tracking their lease portfolios.  
   

  To help you get on the right track, quickly, we’ve rounded up a few resources to best position you in your journey toward complying with ASC 842:  

  • Our first report under The Visual Lease Data Institute, which I referenced earlier in this blog post, explores the opportunities and barriers that companies face in their efforts to comply with ASC 842. It’s jam-packed with unique insights informed by a proprietary survey of 500 senior finance and accounting professionals at private organizations with more than 1,000 employees. 
     
  • Access to our bench of experienced industry experts, some of whom helped inform the construction of ASC 842. Leveraging our knowledge as seasoned accounting and finance professionals, we’re here to address any and all questions about the lease accounting guidelines, the technology and vendor landscape, audit preparedness and how to unlock real ROI for your company along the way. 
     
  • Our Lease Accounting Milestone Planner (LAMP)TM, an interactive and easy-to-use tool that will provide you with clear next steps and goals to help manage your lease accounting process, both before and after you meet initial compliance.

  There’s no time to waste. With Visual Lease’s help, get started today.   

   

  The post No Further Delays From FASB: It’s Time to Move Your ASC 842 Lease Accounting Project Forward first appeared on Visual Lease.]]> https://podcasts.apple.com/us/podcast/commercial-real-estate-covid-lease-disruption-with/id989572322?i=1000541475185#new_tab Mon, 15 Nov 2021 16:16:03 +0000 https://visuallease.com/?p=6470 The Financial Accounting Standards Board issued an accounting standards update Thursday in an effort to simplify the discount rate guidance for lessees that aren’t public companies, including private companies, nonprofits and employee...
  The post Podcast: Commercial Real Estate Covid Lease Disruption with Marc Betesh first appeared on Visual Lease.]]> The Financial Accounting Standards Board issued an accounting standards update Thursday in an effort to simplify the discount rate guidance for lessees that aren’t public companies, including private companies, nonprofits and employee benefit plans.
  The post Podcast: Commercial Real Estate Covid Lease Disruption with Marc Betesh first appeared on Visual Lease.]]> https://www.accountingtoday.com/news/fasb-eases-discount-rate-guidance-for-nonpublic-lessees#new_tab Fri, 12 Nov 2021 19:54:31 +0000 https://visuallease.com/?p=6463 The Financial Accounting Standards Board issued an accounting standards update Thursday in an effort to simplify the discount rate guidance for lessees that aren’t public companies, including private companies, nonprofits and employee...
  The post Article: FASB eases discount rate guidance for nonpublic lessees first appeared on Visual Lease.]]> The Financial Accounting Standards Board issued an accounting standards update Thursday in an effort to simplify the discount rate guidance for lessees that aren’t public companies, including private companies, nonprofits and employee benefit plans.
  The post Article: FASB eases discount rate guidance for nonpublic lessees first appeared on Visual Lease.]]> https://www.bisnow.com/national/news/office/more-than-half-of-all-tenants-are-considering-office-leases-for-at-least-5-years-110851#new_tab Wed, 10 Nov 2021 15:40:21 +0000 https://visuallease.com/?p=6454 Green shoots are beginning to emerge for the office market, with many tenants starting to consider long-term leases — though most firms plan to revise workplace arrangements when the pandemic...
  The post Article: Majority Of Office Landlords, Tenants Expect Expansions, Return To Pre-Pandemic Rents Next Year first appeared on Visual Lease.]]> Green shoots are beginning to emerge for the office market, with many tenants starting to consider long-term leases — though most firms plan to revise workplace arrangements when the pandemic eases.
  The post Article: Majority Of Office Landlords, Tenants Expect Expansions, Return To Pre-Pandemic Rents Next Year first appeared on Visual Lease.]]> https://www.globest.com/2021/11/10/more-tenants-plan-to-increase-space-next-year-than-shrink-it/?slreturn=20211010103532#new_tab Wed, 10 Nov 2021 15:36:54 +0000 https://visuallease.com/?p=6453 More than double the share of commercial real estate tenants are planning to increase rather than decrease their space next year, according to a survey by the Visual Lease Data...
  The post Article: More Tenants Plan To Increase Space Next Year Than Shrink It first appeared on Visual Lease.]]> More than double the share of commercial real estate tenants are planning to increase rather than decrease their space next year, according to a survey by the Visual Lease Data Institute, a lease optimization software provider.
  The post Article: More Tenants Plan To Increase Space Next Year Than Shrink It first appeared on Visual Lease.]]> https://www.accountingtoday.com/news/fasb-considering-leases-standard-delay-for-private-companies#new_tab Wed, 10 Nov 2021 15:32:53 +0000 https://visuallease.com/?p=6452 With the lease accounting standard set to take effect for private companies in mid-December, the Financial Accounting Standards Board will be considering a proposal at a meeting Wednesday to postpone...
  The post Article: FASB considering delay in leases standard for private cos. first appeared on Visual Lease.]]> With the lease accounting standard set to take effect for private companies in mid-December, the Financial Accounting Standards Board will be considering a proposal at a meeting Wednesday to postpone the lease standard for another two years for private companies and nonprofit organizations.
  The post Article: FASB considering delay in leases standard for private cos. first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbestechcouncil/2021/11/09/how-to-turn-lease-data-into-company-savings/?sh=179ec229611c#new_tab Tue, 09 Nov 2021 15:31:04 +0000 https://visuallease.com/?p=6451 Since the onset of the Covid-19 pandemic, businesses have evolved their real estate strategies to comply with the many changes that the pandemic forced upon them. To maintain lease accounting...
  The post Article: How To Turn Lease Data Into Company Savings first appeared on Visual Lease.]]> Since the onset of the Covid-19 pandemic, businesses have evolved their real estate strategies to comply with the many changes that the pandemic forced upon them. To maintain lease accounting compliance — a necessity for companies of all industries and sizes — and to continue to make informed operational decisions, these organizations must properly track and manage their lease data.
  The post Article: How To Turn Lease Data Into Company Savings first appeared on Visual Lease.]]> https://visuallease.com/new-report-from-the-visual-lease-data-institute-reveals-that-the-commercial-real-estate-industry-is-in-recovery/ Tue, 09 Nov 2021 13:30:52 +0000 https://visuallease.com/?p=6438 Majority of surveyed tenants plan to expand their commercial real estate footprint in the New Year   Woodbridge, NJ (Nov. 9, 2021) Visual Lease, the #1 lease optimization software provider, today unveiled a survey of 400 senior accounting and finance...
  The post New Report from The Visual Lease Data Institute Reveals that the Commercial Real Estate Industry is in Recovery first appeared on Visual Lease.]]>

  Majority of surveyed tenants plan to expand their commercial real estate footprint in the New Year  
  

  Woodbridge, NJ (Nov. 9, 2021) Visual Lease, the #1 lease optimization software provider, today unveiled a survey of 400 senior accounting and finance professionals and commercial real estate executives, 200 of whom representing the perspective of tenants, and 200 of whom representing the perspective of landlords. The report entitled, “Commercial Real Estate in 2022: Outlook for an Industry in Recovery,” shares insights into how both sides are approaching leases in response to the ongoing effects of the COVID-19 pandemic.  

  “The commercial real estate industry has dramatically changed over the past nineteen months,” said Marc Betesh, founder and CEO of Visual Lease. “Businesses have grappled with new restrictions, considerations and challenges, which have directly impacted their real estate needs. Both landlords and tenants are uncertain of what shifts and trends are here to stay, which has made planning ahead more difficult than ever before. We created this report to help both parties better understand the industry and ensure that they are maximizing the value of future leases, setting themselves up for success in 2022 and beyond.” 

  Key 2022 trends and predictions from the report include:  

  • Ready to Commit to Longer Terms – Sixty-five percent of surveyed tenants are considering their physical space needs more than one year prior to signing a new lease agreement. Fifty-eight percent of tenants are prioritizing leases of at least five years in length, with nearly 20% interested in 10 or more years of occupancy. While plans are being made, the future remains uncertain as 93% of tenants note that their 2022 real estate strategy is temporary and will likely be revised post-COVID.  
  • Real Estate Footprints Poised to Expand – Sixty-five percent of landlords expect tenants will add space to their real estate portfolios in 2022. Similarly, 70% of tenants plan to expand their commercial real estate footprint in the year ahead.  
  • Back to Work: Urban Revival – Seventy-eight percent of landlords predict that the greatest demand for leased properties in 2022 will appear in cities. Tier 1 cities like Los Angeles and New York are anticipated to draw the biggest crowd, signaling a revival for major metropolitan areas that were previously hard-hit during the onset of the pandemic.  
  • Rents Bounce Back, But Not All Businesses Will – Seventy-five percent of landlords expect 2022 commercial rent prices to be about the same or higher than rent prices were prior to the pandemic, which is in line with what 61% of tenants expect, as well. A rent increase may create some challenges as 61% of tenants admit that their organization fell behind on rent during the pandemic, and 37% are still behind on rent.  
  • Future-proofing Leases to Accommodate Changing Demand – All surveyed (100%) landlords had tenants request modifications to their leases mid-term in response to the impacts of COVID-19. As a result, 99% of landlords have revised their agreements to better accommodate existing and future tenants, including changes to building rules and regulations (57%), operating expenses (54%), indemnification and insurance (45%), as well as sublet/assignment rights, rent abatement and force majeure clauses. 
  • Approaching New Terms With Caution – Based on what they learned from managing their businesses during COVID-19, tenants note that the following will be important considerations when negotiating future leases: flexible scaling plans for space (57%), flexible lease termination (49%), shorter lease duration (36%) and an ability to sublease (33%), among others.  
  • Poor Lease Management Led to Costly Mistakes – Nearly 80% of tenants have experienced negative impacts due to inadequate lease controls, the most frequently reported being the inability to respond to changing circumstances due to the pandemic (34%), missing an option to extend a deadline (28%), miscalculating lease costs (28%) and forgetting to update unfavorable or unwanted lease terms (28%).  

  For full study results, download Commercial Real Estate in 2022: Outlook for an Industry in Recovery. 

  About The Visual Lease Data Institute 

  The Visual Lease Data Institute is a collection of market-leading data, trends and insights on lease accounting, management and optimization created and curated by Visual Lease, provider of the #1 lease optimization software. The Institute was founded on 35 years’ experience managing lease data and financials and was created to arm organizations with the knowledge required to achieve and maintain lease accounting compliance and leverage their leases as strategic business assets. 

  About Visual Lease 

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.  For more information, visit visuallease.com. 

  Media Contacts 
  Erica Bonavitacola 
  Visual Lease 
  T+1 732 860 4838 
  ebonavitacola@visuallease.com 
   
  Anna Patrick 
  Gregory FCA 
  T+1 212 398 9680 
  apatrick@gregoryfca.com 

  The post New Report from The Visual Lease Data Institute Reveals that the Commercial Real Estate Industry is in Recovery first appeared on Visual Lease.]]> https://www.accountingtoday.com/news/private-companies-still-playing-catchup-on-lease-accounting-standard#new_tab Thu, 28 Oct 2021 15:28:53 +0000 https://visuallease.com/?p=6420 The majority of private companies have yet to implement the new lease accounting standard entirely, even though the effective date is fast approaching. Three-quarters (75%) of privately held companies surveyed this spring...
  The post Article: Private cos. still playing catchup on lease accounting first appeared on Visual Lease.]]> The majority of private companies have yet to implement the new lease accounting standard entirely, even though the effective date is fast approaching.

  Three-quarters (75%) of privately held companies surveyed this spring by Visual Lease, a lease accounting software company, were not yet fully compliant with the standard, which is set to take effect on Dec. 15 after multiple delays.

  The post Article: Private cos. still playing catchup on lease accounting first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesrealestatecouncil/2021/09/29/10-red-flags-to-watch-for-when-signing-a-commercial-property-lease/?sh=75f20098155b#new_tab Thu, 28 Oct 2021 14:56:54 +0000 https://visuallease.com/?p=6419 Leasing a commercial property is a huge step for a business. The right space in the right location can attract ideal customers and take an entrepreneur’s business to the next...
  The post Article: 10 Red Flags To Watch For When Signing A Commercial Property Lease first appeared on Visual Lease.]]> Leasing a commercial property is a huge step for a business. The right space in the right location can attract ideal customers and take an entrepreneur’s business to the next level. The key to unlocking this business potential lies in a property’s lease.
  The post Article: 10 Red Flags To Watch For When Signing A Commercial Property Lease first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-appoints-erinn-tarpey-as-chief-marketing-officer/ Tue, 26 Oct 2021 15:22:55 +0000 https://visuallease.com/?p=6411 Company continues to strengthen its senior leadership team Woodbridge, NJ – October 26, 2021 — Visual Lease, the #1 lease optimization software provider, today announced that Erinn Tarpey, current Senior...
  The post Visual Lease Appoints Erinn Tarpey as Chief Marketing Officer first appeared on Visual Lease.]]>

  Company continues to strengthen its senior leadership team

  Woodbridge, NJ – October 26, 2021 — Visual Lease, the #1 lease optimization software provider, today announced that Erinn Tarpey, current Senior Vice President of Marketing, will advance to become the organization’s first Chief Marketing Officer. In her new role, Tarpey will continue to oversee Visual Lease’s brand direction, company positioning and go-to-market strategies for its solutions and services.

  “Erinn joined Visual Lease in early 2020, a critical time for our organization,” said Visual Lease’s founder and CEO, Marc Betesh. “Since then, she has grown our marketing department, advanced our systems and operational performance and enhanced our brand presence and corporate communications. Due to her diligence, focus, tenacity – and the results she has achieved for our business – it gives me great pleasure to recognize her contributions with this promotion. In her new role, Erinn will continue to fuel our continued growth and success as a leader in our industry.”

  Before joining Visual Lease, Tarpey served as a member of the senior leadership team at iCIMS, where the business grew its annual recurring revenue by 25-30% year over year during her near eight years with the company. Prior to joining iCIMS, Tarpey acquired more than 20 years of B2B and B2C marketing experience gained on both the client and agency sides, gaining expertise in managing the development of proprietary research, supporting mergers and acquisitions and marketing through the partner channel.

  “It’s been thrilling to help define and drive Visual Lease’s vision,” said Tarpey. “We are in a unique position, having achieved so much in the past few years, and poised for even more growth in the months to come. In addition to offering superior software and service, we have the strategic foresight to ensure our customers are best positioned for the years ahead. I am looking forward to building on the foundation that our seasoned leadership team has created to reach new heights as the leading lease optimization software provider.”

  Visual Lease is continuing to hire across all departments. Click here to learn about career opportunities.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com

   

  The post Visual Lease Appoints Erinn Tarpey as Chief Marketing Officer first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-announces-alliance-with-arazzo-solutions/ Wed, 13 Oct 2021 13:30:13 +0000 https://visuallease.com/?p=6391 Partnership will empower organizations to accelerate their ability to comply with new lease accounting standards and maximize the value of their commercial real estate assets  Woodbridge, NJ – October 13, 2021 — Visual Lease, the #1 lease optimization software provider, today announced a partnership...
  The post Visual Lease Announces Alliance with Arazzo Solutions first appeared on Visual Lease.]]>

  Partnership will empower organizations to accelerate their ability to comply with new lease accounting standards and maximize the value of their commercial real estate assets 

  Woodbridge, NJ – October 13, 2021 — Visual Lease, the #1 lease optimization software provider, today announced a partnership with Arazzo Solutions, a specialized professional services firm in the commercial/corporate real estate (CRE) industry. This partnership combines both organizations’ deep expertise in lease administration and lease accounting to provide mutual customers with the ability to achieve and sustain lease accounting compliance while simultaneously unlocking the full value of their lease portfolio.  

  “We are thrilled to welcome Arazzo Solutions to the Visual Lease community,” said Marc Betesh, founder and CEO of Visual Lease. “Their level of commitment to their customers and their understanding of the importance of lease accounting mirrors our own values and mission. Together, we’ll equip organizations with the technology, insight and guidance they need to maintain lease accounting compliance and maximize the return on existing and future corporate real estate investments.” 

  With this partnership, Arazzo Solutions will offer its clients lease administration and lease accounting services directly powered by Visual Lease’s software. Arazzo Solutions will better help its clients maintain compliance with important lease accounting deadlines and requirements, and provide them with the crucial lease information needed to make stronger operational decisions. 

  “We recognize that this is a critical time for organizations to reevaluate their real estate investments,” said Deb Vallo, Principal at Arazzo Solutions. “What many don’t realize is that they can’t make informed decisions about their lease portfolio without full visibility into all of their leases. We’re working with Visual Lease to help companies properly manage, track and visualize their leases so that they can successfully leverage their portfolios as strategic assets.” 

  To learn more about Visual Lease’s Alliance Partner program, visit here.  

  About Visual Lease  

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.   

  About Arazzo Solutions 

  Arazzo Solutions is a boutique professional services firm focused on the Commercial and Corporate Real Estate (CRE) industry. Our team has a unique combination of expertise in lease administration, lease accounting, project management, and CRE systems analysis and support. We have a strong commitment to putting our clients first and a passion for helping our clients develop industry-standard best practices and improving links between CRE strategies and their organizational culture, creating a strategic fit that brightly highlights the importance of the CRE team within their organization. We also bring an in-depth understanding of CRE business processes and comprehensive knowledge of CRE accounting, including the latest FASB, IASB, and GASB accounting guidelines (FASB ASC 842, IASB IFRS 16, and GASB 87). Visit us at www.arazzosolutions.com 

  Media Contacts 
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com     

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com  

  The post Visual Lease Announces Alliance with Arazzo Solutions first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-announces-record-breaking-third-quarter/ Mon, 11 Oct 2021 14:06:01 +0000 https://visuallease.com/?p=6393 Company now helps more than 800 organizations manage upwards of 500,000 leases Woodbridge, NJ – October 11, 2021 — Visual Lease, the #1 lease optimization software provider, today announced results...
  The post Visual Lease Announces Record-Breaking Third Quarter first appeared on Visual Lease.]]>

  Company now helps more than 800 organizations manage upwards of 500,000 leases

  Woodbridge, NJ – October 11, 2021 — Visual Lease, the #1 lease optimization software provider, today announced results from the third quarter of 2021, including sustained double-digit annual recurring revenue and customer growth. The company continues to make strategic investments in its product, services, people and infrastructure and is now helping more than 800 organizations achieve lease accounting compliance and improve the financial, legal and operational performance of their leases.

  “There’s a huge shift in the way that organizations are looking at their leases,” said founder and CEO of Visual Lease, Marc Betesh. “They are trying to manage evolving work patterns while simultaneously staying compliant with the new lease accounting rules. As companies revisit their leases to address these demands, they’re realizing how much a dedicated solution like Visual Lease can help. By standardizing and centralizing their lease data, organizations are improving lease performance, reducing costs and streamlining their audit processes.”

  In Q3 2021, Visual Lease:

  Product

  • Streamlined its reporting performance, making it easier for users to quickly generate a Journal Entry Summary Report.
  • Improved the process around financial entries when importing calculations and transaction values.
  • Introduced GASB 87 Complete and ASC 842 Proven Path, which are end-to-end lease accounting solutions and services packages for public sector entities and private companies with fewer than 100 leases.
  • Launched The Visual Lease Data Institute, publishing unique data, trends and insights on lease accounting, management and optimization to help inform its product and community of customers and partners.

  Talent

  • Grew its employee base by more than 25% year-over-year, hiring across a range of departments and levels within the organization.
  • Named a Best Place to Work in New Jersey by NJBIZ.

  Industry Recognitions

  • Ranked in the Top 20% on the Inc. 5000 List for the second consecutive year.
  • Named a Top Software Company of 2021 by The Software Report.
  • Placed in the Capterra Shortlist for Lease Management, identified as a top lease management tool of 2021.
  • Recognized by G2 as a Leader in Lease Accounting and Momentum Leader and High Performer in Lease Administration.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com

   

  The post Visual Lease Announces Record-Breaking Third Quarter first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-announces-q4-webinar-schedule/ Mon, 27 Sep 2021 13:17:10 +0000 https://visuallease.com/?p=6363 Solution provider to host a series of virtual events, gathering industry experts to share unique insights and opportunities around lease accounting  Woodbridge, NJ – Sept. 27, 2021 — Visual Lease,...
  The post Visual Lease Announces Q4 Webinar Schedule first appeared on Visual Lease.]]>

  Solution provider to host a series of virtual events, gathering industry experts to share unique insights and opportunities around lease accounting

   Woodbridge, NJ – Sept. 27, 2021 — Visual Lease, the #1 lease optimization software provider, has announced its lineup of complimentary educational webinars for the final quarter of 2021. The organization has planned several online events to provide senior accounting and finance professionals with insight into how to achieve and maintain lease accounting compliance, unlock cost-saving opportunities within their lease portfolios and more.

  Marc Betesh, founder and CEO of Visual Lease, said, “Due to our deep domain expertise in lease management, The Financial Accounting Standards Board (FASB) sought feedback from experts at Visual Lease when it was devising the new lease accounting standards. We were there for the genesis of ASC 842. Our team understands how complex lease accounting can be.”

  Betesh continued, “Between the knowledge of our in-house experts and the insights we glean from our robust community of customers and partners, we continue to embed industry best practices into our platform. Our upcoming webinars are an opportunity for us to share our expertise with you, helping you to not only achieve and maintain lease accounting compliance, but also, to capitalize on the many business benefits to be had along the way.”

  Visual Lease’s current Q4 webinar schedule features sessions on the following topics:

  • How to Prepare for Common Day 2 Lease Accounting Challenges – During this 3-part webinar series, industry experts will provide insight into how to solve the most pervasive and problematic Day 2 lease accounting challenges. Each session will cover common challenges associated with each focus area, as well as tangible examples and actionable takeaways for attendees. The presenters will cover how to leverage best practices and dedicated technology to address each concentration:
    • • Part I: Remeasurements (Oct. 12) – Register here.
      • Part II: Lease modifications (Nov. 9) – Register here.
      • Part III: Terminations (Dec. 7) – Register here.
  • How to Unlock Financial Opportunities with Lease Optimization (Oct. 21) – In this session, members of the Visual Lease team will dive into different ways to use your lease accounting compliance project to unlock hard- and soft-dollar savings and improve operational performance of your leases. Register here.
  • An Inside Look at the Visual Lease Product Roadmap (Nov. 16) – In this webinar, members of the Visual Lease senior leadership team will provide a sneak-peek into new product capabilities that are on the horizon to help Visual Lease users manage and maximize every asset in their lease portfolio. Register here
  • Get Ahead of Day 2 Lease Accounting with Visual Lease (Dec. 14) – In this session, industry leaders will discuss the main roadblocks associated with lease accounting compliance and how to address these challenges with centralized lease data. Register here.

  To keep up with all of Visual Lease’s upcoming virtual events, visit here.

  About Visual Lease
  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com

  The post Visual Lease Announces Q4 Webinar Schedule first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbestechcouncil/2021/09/15/how-to-influence-a-fintech-providers-product-roadmap/?sh=1034aa964d81#new_tab Fri, 17 Sep 2021 13:18:22 +0000 https://visuallease.com/?p=6341 Are you truly getting the most value out of your financial technology? We recently surveyed 500 senior and accounting finance professionals and found that 53% of respondents use three to...
  The post Article: How To Influence A FinTech Provider’s Product Roadmap first appeared on Visual Lease.]]> Are you truly getting the most value out of your financial technology?
  We recently surveyed 500 senior and accounting finance professionals and found that 53% of respondents use three to five software solutions to support financial decision making, accounting and financial reporting, planning and analysis and audit prep.
  The post Article: How To Influence A FinTech Provider’s Product Roadmap first appeared on Visual Lease.]]> https://visuallease.com/lease-accounting-disclosures-6-tips-for-successful-asc-842-reporting/ Thu, 09 Sep 2021 16:22:11 +0000 https://visuallease.com/?p=3621 Under the FASB ASC 842 standard for lease accounting, organizations face significant changes including both new disclosures and specific requirements for how to report those disclosures. For instance, in the...
  The post Lease accounting disclosures: 6 tips for successful ASC 842 reporting first appeared on Visual Lease.]]>

  Under the FASB ASC 842 standard for lease accounting, organizations face significant changes including both new disclosures and specific requirements for how to report those disclosures.

  For instance, in the first year of ASC 842 adoption, public companies must provide the annual disclosures required by the new accounting standard in each quarterly report. That is, they must include the disclosures in their first, second and third quarter Form 10-Q filings. (See also tip #6 below.)

  Thinking ahead and planning for disclosure requirements is crucial for initial ASC 842 adoption as well as ongoing compliance. It helps to ensure that lease accounting and reporting are thorough and accurate.

  In this blog, we offer 6 tips on what to disclose in ASC 842 reporting. These tips can help you meet the new requirements and satisfy auditors, whether your organization is:

  • Preparing for compliance and for issuing your first financial statements under ASC 842
  • Post-ASC 842 adoption and looking for ways to improve the reporting process moving forward

  Tip #1: Disclose how you determined your lease discount rates.

  Are lease discount rates relevant to your financial reporting? If so, the ASC 842 standard requires you to disclose how you determined those rates, including any related assumptions and judgments.

  For most lessees, the discount rate is their incremental borrowing rate (IBR). However, providing a generic disclosure that just repeats the ASC 842 definition of IBR will not satisfy this disclosure requirement.

  Instead, you should provide specific information on how you determined the IBRs reflected in the measurement of your leases, including: 

  •     What inputs you used
  •     What adjustments you made to those inputs in estimating your discount rates
  •     Whether you took a portfolio approach, determining an IBR for a group of leases

  Tip #2: Determine the ROU asset carrying amount in your operating leases.

  Unless the value of a right-of-use (ROU) asset in an operating lease is impaired, you need to determine the carrying amount of the ROU asset from the date the lease started through the end of the lease term.

  You can do this using one of two methods:

  Method 1: Derive the carrying amount of the ROU asset from the carrying amount of the lease liability at the end of each reporting period as follows.

  

  Method 2: Calculate ROU asset amortization as the difference between the straight-line lease cost for the period (including amortization of initial direct costs) and the periodic accretion of the lease liability using the effective interest method as follows.

  

  Tip #3: Disclose if you chose to not separate lease and non-lease components.

  An ASC 842 practical expedient allows companies to save time by calculating the value of fixed lease payments without having to perform an allocation to the lease and non-lease components.

  However, if you choose to take advantage of this practical expedient and not separate lease components from non-lease components, you must also:

  • Disclose that you elected to apply this practical expedient
  • Disclose the class(es) of underlying assets for which you elected it — for example, perhaps you applied it to all your real estate leases but not your equipment leases

  Read more about this and other practical expedients in our blog ASC 842 Practical Expedients and Transition Requirements.

  Tip #4: Disclose variable lease costs and short-term lease costs separately.

  The lease accounting standard under ASC 842 requires that you disclose your variable lease costs and short-term lease costs separately rather than as a single amount.

  Where do variable short-term lease costs belong?

  Since it is not uncommon to have short-term leases that include variable payments, you might wonder: Should you disclose these costs along with other short-term lease costs? Or should you include them with variable lease costs?

  As a rule, you should disclose variable short-term lease costs with other short-term lease costs. However, since ASC 842 is not clear in this regard, disclosing variable short-term lease costs with variable lease costs would also be acceptable.

  Either way, be sure to disclose where you choose to include variable short-term lease amounts in your quantitative lease cost disclosures.

  What qualifies as a variable lease cost?

  It is important to disclose all amounts that meet the definition of variable lease costs. That is,  disclose not only costs related to the performance or use of the underlying asset (such as percentage rent or per-usage fees), but also any other variable payments not included in the measurement of the lease liability. For example:

  • Incremental rent above the amount included in the lease liability and paid during the year due to a change in the Consumer Price Index (CPI)
  • The portion of property taxes or insurance payments attributable to the lease component — or the entirety of those payments if you elected not to separate lease and non-lease components
  • The portion of common area maintenance (CAM) charges or other service payments attributable to the lease component — or the entirety of the payments if you did not separate lease and non-lease components

  Tip #5: Disclose the nature of your variable lease payments.

  The ASC 842 lease accounting standard also requires companies to disclose information about the nature of their leases. This greater level of detail allows auditors, stakeholders and other interested parties to better understand a company’s leasing strategy and how its future lease payment obligations may differ from the lease liabilities on the balance sheet.

  If your variable lease costs are relevant, and especially if they are a significant portion of your company’s total lease costs, you should provide detailed disclosures about those payment arrangements, including information such as:

  • Why you have a significant number of variable payments
  • The basis, terms and conditions you used to determine the variable lease payments
  • Expectations of, and the reasons for, variability in amounts owed from period to period

  Tip #6: Carry forward ASC 840 comparative disclosures as required.

  If your company has elected the effective date transition method for transitioning to ASC 842, you do not need to revise the financial statements for comparative periods presented before your ASC 842 adoption date, nor provide ASC 842 disclosures for periods before that date.

  However, this transition method does include some important new requirements for carrying over comparative disclosures from ASC 840.

  Namely, in your post-adoption financial statements, you must carry forward all the disclosures that were required under ASC 840 for comparative periods before the effective date. This includes the final disclosures of future operating and capital lease commitments prepared as of the last balance sheet to which ASC 840 applied.

  You must present the disclosures that you carry forward in each set of interim and annual financial statements  — for example, in your quarterly and annual reports — issued for the year of adoption.

  For accurate, consistent and thorough reporting…

  Keeping these disclosures and other ASC 842 lease accounting requirements in mind as you gather and abstract your lease data will help to ensure the accuracy, consistency and thoroughness of your financial reporting.

  Additionally, the use of a lease accounting solution such as Visual Lease will further help by providing a single centralized source for storing, tracking and managing lease data, with configurable tools for lease calculations and reporting, as well as integration to the balance sheet.

  To learn more about the lease disclosure requirements, read our blog 3 Things to Consider When Generating Lease Accounting Disclosure Reports.

  The post Lease accounting disclosures: 6 tips for successful ASC 842 reporting first appeared on Visual Lease.]]> https://www.complianceweek.com/accounting-and-auditing/changing-accounting-standards-driving-financial-process-remediations/30731.article#new_tab Fri, 03 Sep 2021 13:29:17 +0000 https://visuallease.com/?p=6260 Public companies have significantly changed their financial processes in the past year and are not done yet, according to data released last month by Deloitte.
  The post Article: Changing accounting standards driving financial process remediations first appeared on Visual Lease.]]> Public companies have significantly changed their financial processes in the past year and are not done yet, according to data released last month by Deloitte.
  The post Article: Changing accounting standards driving financial process remediations first appeared on Visual Lease.]]> https://visuallease.com/press-release-visual-lease-honored-as-gold-stevie-award-winner-in-the-2021-stevie-awards-for-great-employers/ Mon, 30 Aug 2021 16:06:59 +0000 https://visuallease.com/?p=6216 Woodbridge, NJ – August 30, 2021 — Visual Lease, the #1 lease optimization software provider, has been named the winner of a Gold Stevie® Award in the Employer of the...
  The post Press release: Visual Lease Honored as Gold Stevie® Award Winner in the 2021 Stevie Awards for Great Employers first appeared on Visual Lease.]]>

  Woodbridge, NJ – August 30, 2021 — Visual Lease, the #1 lease optimization software provider, has been named the winner of a Gold Stevie® Award in the Employer of the Year category in the sixth annual Stevie Awards for Great Employers. This category recognizes the world’s best employers based on their efforts since the beginning of 2020.

  “Like many businesses, we’ve recently had to adjust our way of working.” said Visual Lease’s founder and CEO, Marc Betesh. “This recognition validates the choices we’ve made, such as fully embracing remote work and committing to a culture of open communication. I’m proud of our team for helping to maintain our sense of community, always responding to and supporting each other’s needs. A great employer listens to and prioritizes its people, and that’s something we’ll continue to do through every phase of our growth.”

  The Stevie Awards for Great Employers recognize the world’s best employers and the human resources professionals, teams, achievements and HR-related products and suppliers who help to create and drive great places to work.

  More than 950 nominations from organizations of all sizes in 29 nations were submitted this year for consideration in a wide range of HR-related categories. More than 70 professionals worldwide participated in the judging process to select this year’s Stevie Award winners.

  Earlier this year, Visual Lease was ranked in the top 20% of the 2021 Inc. 5000 list and among the Top 100 Software Companies of 2021 by The Software Report. The company was also honored with a Bronze Stevie® Award in the Fastest Growing Company of the Year category in The 19^th Annual American Business Awards^® and named a Top Workplace in New Jersey by NJ.com.

  In 2020, Visual Lease gained its first placement on the Inc. 5000 list of fastest-growing companies in America and was named among the top third of high-growth companies on the Deloitte 2020 Technology Fast 500. Visual Lease was also recognized by NJBIZ as one of the Best Places to Work in New Jersey and was named No. 10 on NJBIZ’s list of New Jersey’s 50 Fastest Growing Companies in 2020.

  To keep up with all Visual Lease’s announcements and milestones, visit its newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com

  The post Press release: Visual Lease Honored as Gold Stevie® Award Winner in the 2021 Stevie Awards for Great Employers first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesfinancecouncil/2021/08/24/gasb-87-six-steps-to-success-under-the-new-lease-accounting-standard/?sh=2e24b7bf4126#new_tab Wed, 25 Aug 2021 15:22:53 +0000 https://visuallease.com/?p=6203 Last year, the Governmental Accounting Standards Board (GASB) voted to defer the effective date of lease accounting standard GASB 87 to give public sector entities more time to adapt to...
  The post Article: GASB 87: Six Steps To Success Under The New Lease Accounting Standard first appeared on Visual Lease.]]> Last year, the Governmental Accounting Standards Board (GASB) voted to defer the effective date of lease accounting standard GASB 87 to give public sector entities more time to adapt to the many impacts of Covid-19.
  The post Article: GASB 87: Six Steps To Success Under The New Lease Accounting Standard first appeared on Visual Lease.]]> https://www.accountingtoday.com/news/lease-accounting-changes-keep-on-coming#new_tab Fri, 20 Aug 2021 18:42:47 +0000 https://visuallease.com/?p=6196 Private companies are facing a deadline on implementing the new lease accounting standard, but recent updates in the rules could make an impact on their financial statements and disclosures.
  The post Article: Lease accounting changes keep on coming first appeared on Visual Lease.]]> Private companies are facing a deadline on implementing the new lease accounting standard, but recent updates in the rules could make an impact on their financial statements and disclosures.
  The post Article: Lease accounting changes keep on coming first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesrealestatecouncil/2021/08/17/business-challenges-and-opportunities-arise-as-lease-accounting-deadline-looms/?sh=1aff89e71ce1#new_tab Wed, 18 Aug 2021 17:46:53 +0000 https://visuallease.com/?p=6179 The financial world has a never-ending list of new standards and practices to adhere to, many of which intersect with the world of corporate real estate.
  The post Article: Business Challenges And Opportunities Arise As Lease Accounting Deadline Looms first appeared on Visual Lease.]]> The financial world has a never-ending list of new standards and practices to adhere to, many of which intersect with the world of corporate real estate.
  The post Article: Business Challenges And Opportunities Arise As Lease Accounting Deadline Looms first appeared on Visual Lease.]]> https://visuallease.com/press-release-visual-lease-ranks-in-the-top-20-on-the-2021-inc-5000-list/ Tue, 17 Aug 2021 13:05:06 +0000 https://visuallease.com/?p=6170 Organization recognized as one of the fastest-growing private companies in America for the second consecutive year Woodbridge, NJ – August 17, 2021 — Visual Lease, the #1 lease optimization software...
  The post Press release: Visual Lease Ranks in the Top 20% on the 2021 Inc. 5000 List first appeared on Visual Lease.]]>

  Organization recognized as one of the fastest-growing private companies in America for the second consecutive year

  Woodbridge, NJ – August 17, 2021 — Visual Lease, the #1 lease optimization software provider, was named on the 2021 Inc. 5000 list of the fastest-growing private companies in America. Rankings were based on participating companies’ three-year growth rate, and this inclusion marks Visual Lease’s second consecutive year placing within the top 20% of the private companies recognized.

  “These past few years have required businesses to pivot and work differently,” said Visual Lease’s founder and CEO, Marc Betesh. “In navigating this challenging climate, many organizations have uncovered new ways to operate and support their customers. Our consistent and continued growth mirrors just how important lease accounting compliance has become for companies across all sectors, and how Visual Lease is rising to help them take control over their lease portfolios.”

  The list represents a unique window into the most successful companies within the American economy’s most dynamic segment—its independent businesses. Intuit, Zappos, Under Armour, Microsoft, Patagonia and many other well-known names gained their first national exposure as honorees on the Inc. 5000.

  In addition to this recognition, earlier this year Visual Lease was ranked among the Top 100 Software Companies of 2021 by The Software Report. The company was also honored with a Bronze Stevie® Award in the Fastest Growing Company of the Year category in The 19^th Annual American Business Awards^® and named a Top Workplace in New Jersey by NJ.com.

  In 2020, Visual Lease gained its first placement on the Inc. 5000 list of fastest-growing companies in America and was named among the top third of high-growth companies on the Deloitte 2020 Technology Fast 500. Visual Lease was also recognized by NJBIZ as one of the Best Places to Work in New Jersey and was named No. 10 on NJBIZ’s list of New Jersey’s 50 Fastest Growing Companies in 2020.

  To keep up with all of Visual Lease’s announcements and milestones, visit its newsroom.

  About Visual Lease

  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  Media Contacts
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com

  The post Press release: Visual Lease Ranks in the Top 20% on the 2021 Inc. 5000 List first appeared on Visual Lease.]]> https://www.tmcnet.com/usubmit/2021/07/29/9419896.htm#new_tab Thu, 12 Aug 2021 15:40:41 +0000 https://visuallease.com/?p=6094 Visual Lease, the #1 lease optimization software provider, today unveiled the results of an in-depth study of 500 senior finance and accounting professionals analyzing where companies are in their efforts...
  The post Article: New Report From The Visual Lease Data Institute Reveals Urgent Action Needed for Private Companies to Comply With Lease Accounting Standard ASC 842 first appeared on Visual Lease.]]> Visual Lease, the #1 lease optimization software provider, today unveiled the results of an in-depth study of 500 senior finance and accounting professionals analyzing where companies are in their efforts toward achieving compliance with ASC (News – Alert) 842.
  The post Article: New Report From The Visual Lease Data Institute Reveals Urgent Action Needed for Private Companies to Comply With Lease Accounting Standard ASC 842 first appeared on Visual Lease.]]> https://www.equipmentfa.com/news/32727/study-urgent-action-needed-for-private-firms-to-comply-with-lease-accounting-standard Thu, 12 Aug 2021 15:38:53 +0000 https://visuallease.com/?p=6093 Visual Lease unveiled the results of an in-depth study of 500 senior finance and accounting professionals analyzing where companies are in their efforts toward achieving compliance with ASC 842. The report...
  The post Article: Study: Urgent Action Needed for Private Firms to Comply with Lease Accounting Standard first appeared on Visual Lease.]]> Visual Lease unveiled the results of an in-depth study of 500 senior finance and accounting professionals analyzing where companies are in their efforts toward achieving compliance with ASC 842. The report reveals that despite 100 percent of respondents acknowledging the many benefits that lease accounting can bring, 75 percent are not yet compliant.
  The post Article: Study: Urgent Action Needed for Private Firms to Comply with Lease Accounting Standard first appeared on Visual Lease.]]> https://visuallease.com/press-release-visual-lease-announces-asc-842-proven-path/ Tue, 10 Aug 2021 15:55:26 +0000 https://visuallease.com/?p=6085 Package provides robust tech capabilities and all-inclusive implementation and support required to achieve lease accounting compliance with ASC 842 Woodbridge, NJ – August 10, 2021 — Visual Lease, the #1 lease...
  The post Press release: Visual Lease announces ASC 842 Proven Path first appeared on Visual Lease.]]>

  Package provides robust tech capabilities and all-inclusive implementation and support required to achieve lease accounting compliance with ASC 842

  Woodbridge, NJ – August 10, 2021 — Visual Lease, the #1 lease optimization software provider, today introduced ASC 842 Proven Path, a full end-to-end lease accounting solution for private companies with fewer than 100 leases. Similar to the company’s GASB 87 Complete solution, ASC 842 Proven Path combines Visual Lease’s industry-leading software solution with all-inclusive implementation and ongoing support. It was expertly designed to enable the seamless and accurate adoption of the new lease accounting standard in 50 business days or less.

  “Achieving and maintaining compliance with lease accounting standard ASC 842 is incredibly nuanced,” said Joe Fitzgerald, SVP of Lease Market Strategy at Visual Lease. “There are over 70 data elements to capture and track, and any company with any appreciable number of leases needs to plan out the process carefully. As we saw with public companies back in 2019, it takes significant time to identify all of the leases, collect the documents and capture the data before you can run any lease accounting calculations. Trying to do this without software extends the time even further.”

  ASC 842 Proven Path package users will benefit from:

  • Complete lease accounting and management capabilities to automatically perform all needed lease accounting calculations as well as centralize and manage a company’s lease portfolio, stay on top of important dates and milestones and track all options and obligations.
  • Robust, flexible reporting options with access to a library of more than 100 templates, including one-click Roll-Forward reports which provide a view of an organization’s balances from the beginning through the end of a specific period.
  • Access for unlimited, cross-functional users, all of whom can fully interact with lease data in one centralized system, fueling their ability to reinforce internal processes and create efficiencies.
  • Unparalleled support from an experienced, dedicated team of implementation and account managers and ongoing customer support representatives to maximize the value and use of the platform.

  “We recently conducted a survey of 500 senior finance and accounting professionals and found that the adoption of new technologies was one of biggest anticipated challenges to maintaining compliance with lease accounting standards after 2021,” said founder and CEO, Marc Betesh. “Working with a solution provider that you can rely on is what will help you maintain confidence, ongoing compliance. With a 98% customer retention rate, we are a trusted partner to our customers, and we’re deeply committed to navigating this journey with them.”

  To learn more about Visual Lease’s ASC 842 Proven Path package, visit here.

  Media Contacts
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com

   

  About Visual Lease
  Visual Lease is the #1 lease optimization software provider. We help organizations become compliant with FASB, IFRS and GASB lease accounting standards, while simultaneously improving the financial, legal and operational performance of their leases. Our easy-to-use SaaS platform is embedded with more than three decades of best practices from major corporations and leading industry professionals. Our award-winning solutions are used by 800+ organizations to manage 500,000+ real estate, equipment and other leased assets. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  The post Press release: Visual Lease announces ASC 842 Proven Path first appeared on Visual Lease.]]> https://visuallease.com/new-report-from-the-visual-lease-data-institute-reveals-urgent-action-needed-for-private-companies-to-comply-with-lease-accounting-standard-asc-842/ Thu, 29 Jul 2021 13:00:47 +0000 https://visuallease.com/?p=6051  While 100% of surveyed companies agree on the business value of complying with the lease accounting standard, most are underconfident and unprepared for the looming deadline Woodbridge, NJ (July 29,...
  The post New report from The Visual Lease Data Institute reveals urgent action needed for private companies to comply with lease accounting standard ASC 842 first appeared on Visual Lease.]]>

   While 100% of surveyed companies agree on the business value of complying with the lease accounting standard, most are underconfident and unprepared for the looming deadline

  Woodbridge, NJ (July 29, 2021) – Visual Lease, the #1 lease optimization software provider, today unveiled the results of an in-depth study of 500 senior finance and accounting professionals analyzing where companies are in their efforts toward achieving compliance with ASC 842. The report reveals that despite 100% of respondents acknowledging the many benefits that lease accounting can bring, 75% are not yet compliant. This report marks the first release under The Visual Lease Data Institute, a collection of market-leading data, trends and insights on lease accounting, management and optimization created and curated by Visual Lease.

  The 2021 Lease Accounting Market Analysis: The Road to Readiness for ASC 842 explores the journey, opportunities and barriers that companies face in their efforts to comply with the new accounting standard published by the Financial Accounting Standards Board (FASB), which requires them to track and fully disclose all qualifying leased assets, including commercial real estate and equipment leases. The report was informed by a proprietary survey of 500 senior finance and accounting professionals at private organizations with more than 1,000 employees.  It excludes public sector organizations and governmental entities, which have to comply with a similar lease accounting standard.

  Key highlights of the report include:

  • Real Business Opportunity – All surveyed senior finance and accounting professionals recognize that complying with ASC 842 will offer their companies substantial benefits, including more transparent valuation of the organization (54%), cost savings (54%), easier preparation for audits (53%) and the ability to make strategic lease decisions (50%).
  • Need for Urgent Action – Despite the significant business opportunity that comes with lease accounting compliance, of the 75% of surveyed companies who are not yet fully compliant, nearly half (46%) are less than halfway through or have not yet begun the process. Moreover, a shocking one in five respondents admit that achieving full compliance has been a low business priority.
  • Pandemic Delays – Many private companies may now be playing catch-up from the impact of Covid-19, with more than two in five respondents (43%) noting that their organization’s process has been delayed due to the global pandemic.
  • Race Against the Clock – With the December 2021 deadline for private companies less than five months away, two in five respondents (40%) are only somewhat, not very, or not at all confident about their organization being ready to reach full compliance with ASC 842. One reason why? More than two in five (42%) surveyed admit that the ASC 842 compliance process has taken more time than expected, which puts those who have not started the process at serious risk. This is particularly concerning considering the average anticipated staff hours to gather all the necessary lease information to fully adopt ASC 842 is 1,334 hours, equivalent to more than 33 weeks of full-time labor for a highly skilled worker.
  • Companies Can’t Do It Alone – More than one in three (36%) of senior finance and accounting professionals surveyed note that they don’t have the right people, technology and tools in place. High among the things they consider to be essential in the process are implementing new (48%) or upgrading existing (51%) lease management and accounting software.
  • Not a One-and-Done Disclosure – Reaching ASC 842 compliance in time for the standard’s effective date is only part of the battle. Ninety-nine percent of respondents expect to face ongoing challenges maintaining compliance after the 2021 deadline. Among the most anticipated challenges include accurately tracking and managing future modifications to leases, adopting new technologies to optimize the process and continuing to train and educate staff.

  “We understand just how complex lease accounting is,” said Marc Betesh, founder and CEO of Visual Lease. “For 35 years, we’ve seen firsthand how tight lease portfolio management can amount to millions of dollars in savings and improve business performance. With the deadline for private companies to comply with ASC 842 rapidly approaching, we knew it was the right time to gather our insight, experience and expertise to provide you with the first report under The Visual Lease Data Institute. Our goal is simple – to arm you with the information you need to feel confident about your organization’s lease accounting compliance journey.”

  For full study results and helpful guidance towards ASC 842 compliance, download The 2021 Lease Accounting Market Analysis: The Road to Readiness for ASC 842.

  About Visual Lease

   Visual Lease is the #1 lease optimization software provider for managing, analyzing, streamlining and reporting on lease portfolios. Developed by industry-leading lease professionals and CPAs, it combines GAAP, IFRS and GASB-compliant lease accounting controls with easy, flexible and automated lease management processes. More than 700 of the world’s largest publicly traded, privately-owned and public sector organizations rely on Visual Lease to control their lease portfolios, integrate with their existing business systems and maintain regulatory compliance. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

  About The Visual Lease Data Institute

  The Visual Lease Data Institute is a collection of market-leading data, trends and insights on lease accounting, management and optimization created and curated by Visual Lease, provider of the #1 lease optimization software. The Institute was founded on 35 years’ experience managing lease data and financials and was created to arm organizations with the knowledge required to achieve and maintain lease accounting compliance and leverage their leases as strategic business assets.

  Media Contacts
  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Katie Vroom
  Gregory FCA
  T+1 212 398 9680
  kvroom@gregoryfca.com

  The post New report from The Visual Lease Data Institute reveals urgent action needed for private companies to comply with lease accounting standard ASC 842 first appeared on Visual Lease.]]> https://visuallease.com/press-release-visual-lease-announces-strong-second-quarter-results/ Tue, 20 Jul 2021 14:21:03 +0000 https://visuallease.com/?p=5932 Company reports key strategic investments and double-digit annual recurring revenue growth year-over-year Woodbridge, NJ – July 20, 2021 — Visual Lease, provider of the #1 lease optimization software, today announced results from...
  The post Press release: Visual Lease announces strong second quarter results first appeared on Visual Lease.]]>

  Company reports key strategic investments and double-digit annual recurring revenue growth year-over-year

  Woodbridge, NJ – July 20, 2021 — Visual Lease, provider of the #1 lease optimization software, today announced results from the second quarter of 2021, including double-digit annual recurring revenue growth year-over-year, as well as industry recognition for its robust software capabilities and sustained high growth. The company also continued to make strategic investments across its product and service offerings to help organizations leverage their lease accounting process to unlock a range of business opportunities.

  “We recognize that lease accounting compliance is a long game, and there’s a lot to lose and gain in this process if you’re not on top of the changing requirements,” said Marc Betesh, founder and CEO of Visual Lease. “We’re continuing to make investments in our product and team to not only streamline our customers’ lease accounting compliance, but also help them achieve efficiencies and hard-dollar savings that can have a real long-term impact on their businesses. In fact, we recently conducted a survey of 500 senior finance and accounting professionals, and 100% of them recognized these additional benefits stimulated by the adoption of the new lease accounting standard. We know and understand what those benefits are and show our customers how to achieve them.”

  In Q2 2021, Visual Lease:

  Product

  • Enhanced its reporting performance, resulting in a doubling of the speed of generating disclosure, journal entry summaries and roll-forward reports.
  • Further expanded its GASB support, launching technical accounting features to streamline the handling for lessor termination calculations, schedule modifications and reports.
  • Launched short-term calculations, empowering users to easily create short-term calculations irrespective of the lease terms.
  • Introduced its Customer Advisory Board, assembling a select group of senior financial management and real estate executives from across its base of valued customers to share insights and solicit feedback on Visual Lease’s solutions and services.

  Talent

  • Announced Guy Zerega as SVP of Sales, bringing in an experienced software sales leader to help the organization continue to grow and scale with the industry.
  • Welcomed Pamela Cosmillo as Director of Human Resources, placing an increased emphasis on its people and position as a leading workplace.
  • Grew its employee base by more than 35% year-over-year, hiring across a range of departments and levels within the organization.

   Industry Recognition

  • Continued to expand its Alliance Partner network, solidifying its partnership with Jackson Cross Partners and Alvarez & Marsal to deliver increased value to shared customers navigating new lease accounting standards (ASC 842, IFRS 16 and GASB 87).
  • Named a “High Performer” and “Momentum Leader” in the lease administration category by G2.
  • Recognized as a Top Workplace in 2021 by NJ.com.
  • Honored with a Bronze Stevie® Award in the Fastest Growing Company of the Year category in The 19th Annual American Business Awards®.

  To keep up with announcements from Visual Lease, visit the Visual Lease Newsroom.

  About Visual Lease

  Visual Lease is the provider of the #1 lease optimization software for managing, analyzing, streamlining and reporting on lease portfolios. Developed by industry-leading lease professionals and CPAs, it combines GAAP, IFRS and GASB-compliant lease accounting controls with easy, flexible and automated lease management processes. More than 700 of the world’s largest publicly traded, privately-owned and public sector organizations rely on Visual Lease to control their lease portfolios, integrate with their existing business systems and maintain regulatory compliance. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com.

   

  Media Contacts

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

   

  Geena Pickering
  Gregory FCA
  T+1 212 398 9680
  gpickering@gregoryfca.com

   

  The post Press release: Visual Lease announces strong second quarter results first appeared on Visual Lease.]]> https://visuallease.com/press-release-visual-lease-ranked-a-top-software-company-of-2021/ Thu, 15 Jul 2021 13:24:40 +0000 https://visuallease.com/?p=5921

  

  Woodbridge, NJ – July 15, 2021 — Visual Lease, provider of the #1 lease optimization software, has been ranked among the Top 100 Software Companies of 2021 by The Software Report. Visual Lease was the only lease accounting and administration software company to have been included on the list. This recognition comes on the heels of Visual Lease being named a High Performer and Momentum Leader in lease accounting by G2, the world’s leading business software review site.

  “We are honored and humbled by this inclusion,” said Visual Lease’s founder and CEO, Marc Betesh. “The software industry is vast and accounts for the some of the most impactful businesses worldwide. After an unprecedented year and a half, I’m proud of all that the team has accomplished, and the caliber of the products and services that we continue to provide to our community of customers. Congratulations to our employee base and fellow award recipients.”

  The Software Report evaluated The Top 100 Software Companies of 2021 based on certain criteria, including software product quality, management team caliber and company culture.

  Visual Lease was recently honored with a Bronze Stevie® Award in the Fastest Growing Company of the Year category in The 19^th Annual American Business Awards^® and named a Top Workplace in New Jersey by NJ.com. In 2020, Visual Lease gained recognition within the top 10 percent on the Inc. 5000 list of fastest-growing companies in America and the top third of high-growth companies on the Deloitte 2020 Technology Fast 500. Visual Lease was also recognized by NJBIZ as one of the Best Places to Work in New Jersey and was named No. 10 on NJBIZ’s list of New Jersey’s 50 Fastest Growing Companies in 2020. Last year marked the third straight year that Visual Lease experienced double-digit growth.

  To keep up with all of Visual Lease’s announcements and milestones, visit its newsroom.

  About Visual Lease

  Visual Lease is the provider of the #1 lease optimization software for managing, analyzing, streamlining and reporting on lease portfolios. Developed by industry-leading lease professionals and CPAs, it combines GAAP, IFRS and GASB-compliant lease accounting controls with easy, flexible and automated lease management processes. More than 700 of the world’s largest publicly traded and privately-owned corporations rely on Visual Lease to control their lease portfolios, integrate with their existing business systems and maintain regulatory compliance. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com. 

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Geena Pickering
  Gregory FCA
  T+1 212 398 9680
  gpickering@gregoryfca.com

  The post Press release: Visual Lease ranked a top software company of 2021 first appeared on Visual Lease.]]> https://visuallease.com/press-release-visual-lease-introduces-gasb-87-complete/ Mon, 12 Jul 2021 17:30:24 +0000 https://visuallease.com/?p=5900

  

  Provides a proven and fully supported path to achieve lease accounting compliance with GASB 87 in 50 business days or less

  Woodbridge, NJ – July 12, 2021 — Visual Lease,  provider of the #1 lease optimization software, today announced GASB 87 Complete, a full end-to-end lease accounting solution for state and local governments and other public sector entities. GASB 87 Complete provides entities with Visual Lease’s industry-leading lease accounting and management software combined with all-inclusive, multi-tiered customer training and support. With GASB 87 Complete, entities can utilize a robust, fully implemented system in 50 business days or less, without any hidden fees.

  “For government and public entities, there is simply no time to waste regarding GASB 87,” said Joe Fitzgerald, SVP of Market Strategy at Visual Lease. “How they manage their lease data and their capacity to produce accurate journal entries will directly impact their ability to meet the standard. Our software and team of experts will get them on a proven path to achieve and maintain compliance – quickly.”

  GASB 87 Complete package users will benefit from:

  • Industry-leading lease administration capabilities to easily manage critical dates, monitor obligations and track data across their entire lease portfolio.
  • Full lease accounting functionality to automatically generate audit-ready journal entries, disclosures and reports.
  • Unlimited cross-functional users, all of whom can fully interact with lease data in one centralized system, fueling their ability to reinforce internal processes and create efficiencies.
  • Unparalleled support from experienced, dedicated implementation and account managers and ongoing customer support representatives to maximize the value and use of the platform.

  “Our solution is informed by more than 35 years of experience managing lease financials,” said founder and CEO, Marc Betesh. “We’ve facilitated hundreds of successful implementations. Our in-house team of experts deeply understand – and even helped structure – the new lease accounting standards. We know what it takes to achieve and maintain compliance, and we’re a trusted partner to countless organizations. Our GASB 87 Complete package is a unique solution that incorporates everything needed by public sector entities.”

  To learn more about Visual Lease’s GASB 87 Complete package, visit here.

  About Visual Lease

  Visual Lease is the provider of the #1 lease optimization software for managing, analyzing, streamlining and reporting on lease portfolios. Developed by industry-leading lease professionals and CPAs, it combines GAAP, IFRS and GASB-compliant lease accounting controls with easy, flexible and automated lease management processes. More than 700 of the world’s largest publicly traded and privately-owned corporations rely on Visual Lease to control their lease portfolios, integrate with their existing business systems and maintain regulatory compliance. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com. 

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Geena Pickering
  Gregory FCA
  T+1 212 398 9680
  gpickering@gregoryfca.com

  The post Press release: Visual Lease introduces GASB 87 Complete first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbestechcouncil/2021/07/05/how-to-properly-evaluate-your-tech-stack-before-investing-in-a-new-solution/?sh=362267b027de#new_tab Mon, 05 Jul 2021 14:56:30 +0000 https://visuallease.com/?p=5894 In a 2020 IDC survey, 42% of technology decision makers reported that their organizations planned to invest in technology to close the digital transformation gap. We expect that number has...
  The post Article: How to properly evaluate your tech stack before investing in a new solution first appeared on Visual Lease.]]> In a 2020 IDC survey, 42% of technology decision makers reported that their organizations planned to invest in technology to close the digital transformation gap. We expect that number has since risen. Companies invest in technology for several reasons: to streamline crucial processes, to stay relevant and to find and maintain a competitive edge. What it comes down to is that a company’s tech stack is a key component of its growth strategy.
  The post Article: How to properly evaluate your tech stack before investing in a new solution first appeared on Visual Lease.]]> https://visuallease.com/press-release-visual-lease-named-high-performer-and-momentum-leader-by-g2/ Wed, 30 Jun 2021 14:35:34 +0000 https://visuallease.com/?p=5882

  

  Woodbridge, NJ – June 29, 2021 — Visual Lease, provider of #1 lease optimization software, has been identified by G2 as a “High Performer” in the Summer 2021 quarter for Lease Administration Software. G2 is the world’s leading business software review site and this High Performer rating was based on Visual Lease’s high levels of customer satisfaction and ratings from real users. G2 also identified Visual Lease as a “Momentum Leader” in its Lease Administration Software Momentum Grid Report, based on a composite score that combines a product’s growth indicators with customer satisfaction ratings.

  “We are honored to have been recognized as a high performer and momentum leader in our space,” said Marc Betesh, founder and CEO of Visual Lease. “We’ve seen firsthand the impact that having the right lease management solution can have on an organization’s lease accounting. We’re deeply committed to providing our customers with a solution that brings lease accounting and management together to help maintain compliance and also tighten and elevate the controls around leases.”

  G2 reviews included reports of:

  • Ease of use –  allowing teams to adopt the software quickly and efficiently.
  • Robust capabilities – fully supporting lease administration and accounting requirements and needs.
  • Unparalleled support and service –  helping customers to maximize their use of the platform.
  • Strong data visualization – providing a clear view of critical lease data, as well as potential risks and areas of opportunity.

  “It is the authentic voice of the customer that powers our reports at G2 – ranking B2B software founded on users’ experience in buying, implementing and using it,” said Tom Pringle, Vice President of Research at G2. “We are delighted to highlight the tangible achievements of software solutions ranked on our site as they showcase the voice of the user while delivering valuable, actionable insights to other potential buyers and users.”

  Learn more about what users have to say on Visual Lease’s G2 profile.

  About Visual Lease

  Visual Lease is the provider of the #1 lease optimization software for managing, analyzing, streamlining and reporting on lease portfolios. Developed by industry-leading lease professionals and CPAs, it combines GAAP, IFRS and GASB-compliant lease accounting controls with easy, flexible and automated lease management processes. More than 700 of the world’s largest publicly traded and privately-owned corporations rely on Visual Lease to control their lease portfolios, integrate with their existing business systems and maintain regulatory compliance. Committed to ongoing innovation and unparalleled customer service, Visual Lease helps organizations transform their lease compliance requirements into financial opportunities. For more information, visit visuallease.com. 

  Media Contacts 

  Erica Bonavitacola
  Visual Lease
  T+1 732 860 4838
  ebonavitacola@visuallease.com

  Geena Pickering
  Gregory FCA
  T+1 212 398 9680
  gpickering@gregoryfca.com

  The post Press release: Visual Lease named High Performer and Momentum Leader by G2 first appeared on Visual Lease.]]> https://visuallease.com/the-benefits-and-business-impact-of-lease-optimization/ Fri, 25 Jun 2021 18:28:24 +0000 https://visuallease.com/?p=5867 There is power within your lease portfolio. Over the last year, public and private businesses have taken a closer look at their leases – and experienced the downstream benefits of...
  The post The benefits and business impact of lease optimization first appeared on Visual Lease.]]>

  There is power within your lease portfolio. Over the last year, public and private businesses have taken a closer look at their leases – and experienced the downstream benefits of lease optimization. Businesses who must comply with the new lease accounting standards (e.g., FASB ASC 842) are now examining their leases with a higher level of scrutiny than ever before. Additionally, over the last year, companies looked to their leases to reduce the financial impact of COVID-19. In return, these businesses have experienced operational benefits associated with lease optimization.

  What is lease optimization?

  Optimizing your lease portfolio means:

  1. Having a controlled inventory of all lease documentation that is updated to account for all changes and modifications.
  2. The ability to capture, monitor and act on all critical lease dates, including end of-term options.
  3. Ensuring changes in lease terms are reflected in payment schedules and lease accounting disclosure reports.
  4. Conducting regular audits of your leases and the underlying assets by taking stock of your portfolio and identifying gaps and opportunities.

  Lease optimization allows your business to uncover savings, streamline lease accounting compliance and accommodate pivotal business needs with agility.

  Identify cost-saving opportunities

  Over the last year, businesses looking to cut excess business expenses were increasingly mindful of their leases, given leases are the second largest business expense besides payroll. Lease optimization helps organizations identify areas of their leases where they are overspending – and save money through visibility into that data.

  Real customer lease optimization examples

  Here are some examples of how Visual Lease has helped hundreds of customers save money through lease optimization. Before partnering with us:

  • A large manufacturing company lost $105k because they did not realize that their lessor was continuing to bill expenses for surrendered property.
  • One of the largest insurance companies in the US lost $185k because they didn’t realize their landlord needed to offset operating expense increases against tax decreases.
  • A national bank lost $500k because the tenant forgot to request reimbursement for tenant improvements from the landlord.
  • A large tech company lost $210k because the tenant was not aware that tax abatements were not being added back to the base tax amount.

  These are examples that with the right information, perspective and tools in hand, lease optimization can be leveraged to materially improve business processes and generate savings in a previously undermanaged area of an organization.

  Capture modifications and adjustments that impact lease accounting compliance

  Leases change – and adjustments need to be tracked and evaluated under the new lease accounting standards (ASC 842, IFRS 16, GASB 87).

  Determining whether a modification has taken place can be operationally challenging, particularly for companies with large lease portfolios or for organizations that do not have the systems and processes in place to properly handle and account for these events. This analysis is complicated and will most likely require a dedicated team and technology to ensure attention to detail.

  That said, this is THE perfect time for you to take the extra steps towards optimizing your lease portfolio.

  You need to feel confident throughout every stage of the lease accounting compliance journey:

  • Day 1 – Compliance (centralizing leases and producing accurate reports)
  • Day 2 – Sustainable Auditability (implementing processes and controls)
  • Day 3 – Optimization (revisiting and bridging gaps)

  Accommodate business needs with agility

  Another positive of lease optimization is that it enables your business to pivot and identify emerging lease needs as your organization grows – or vice versa. Having the ability to access your leases in one centralized location – and report on your portfolio in any way helps you to identify the most effective way to scale your lease portfolio to meet your needs.

  The post The benefits and business impact of lease optimization first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesfinancecouncil/2021/06/22/lease-accounting-success-five-questions-to-assess-your-current-process/?sh=4d7443fe3b8e#new_tab Wed, 23 Jun 2021 15:57:02 +0000 https://visuallease.com/?p=5857 Last year, the Financial Accounting Standards Board (FASB) provided private companies with an extra year to adopt lease accounting standard ASC 842. When this was announced, 63.8% of surveyed private company executives...
  The post Article: Lease accounting success: Five questions to assess your current process first appeared on Visual Lease.]]> Last year, the Financial Accounting Standards Board (FASB) provided private companies with an extra year to adopt lease accounting standard ASC 842. When this was announced, 63.8% of surveyed private company executives reported that they planned to take advantage of the extension.
  The post Article: Lease accounting success: Five questions to assess your current process first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesrealestatecouncil/2021/06/18/10-financial-commercial-lease-clauses-tenants-need-to-understand/?sh=106ed3102f4a#new_tab Fri, 18 Jun 2021 14:28:41 +0000 https://visuallease.com/?p=5850 Real estate leases can serve as key strategic assets for companies, presenting opportunities to improve the execution of a business strategy while also creating operational efficiencies. But leases also present...
  The post Article: 10 financial commercial lease clauses tenants need to understand first appeared on Visual Lease.]]> Real estate leases can serve as key strategic assets for companies, presenting opportunities to improve the execution of a business strategy while also creating operational efficiencies. But leases also present risks.
  The post Article: 10 financial commercial lease clauses tenants need to understand first appeared on Visual Lease.]]> https://visuallease.com/private-market-prepares-to-adopt-new-lease-accounting-rules-lessons-learned-from-public-companies/ Thu, 17 Jun 2021 18:59:43 +0000 https://visuallease.com/?p=5847 This article originally appeared here in Forbes. As a result of Covid-19 and the changing landscape related to leases, private companies have received more time to prepare for and adopt...
  The post Private market prepares to adopt new lease accounting rules: Lessons learned from public companies first appeared on Visual Lease.]]>

  This article originally appeared here in Forbes.

  As a result of Covid-19 and the changing landscape related to leases, private companies have received more time to prepare for and adopt the new lease accounting standards in their financial reporting. Last year, the Financial Accounting Standards Board (FASB) further delayed the deadline for private companies to comply with the lease accounting standard ASC 842, which brings most of a company’s operating leases onto its balance sheet. This delay has given private companies nearly two additional years to comply with the new lease accounting standard. Because public companies have already gone through this process, there are many lessons that can be derived from their journey to help private companies as they move through their own adoption.

  Perhaps the biggest lesson learned from public companies, which we’ve seen through our clients’ experiences, is that adopting the new lease accounting standard takes time, can be quite complex and results in a resource-consuming process, particularly if there is a lack of cross-departmental collaboration. With the ASC 842 deadline for private companies looming, there are several things private organizations can do to set themselves up for success.

  Know What Lease Data To Gather And Where To Get It

  Public companies learned that gathering and validating data was the most challenging part of the lease accounting compliance journey. Companies with large, diverse lease portfolios found lease contracts — and thus the data within those documents — can be scattered across any number of separate sources. Not only is it tedious to gather contracts and relevant data, but it’s also easy to overlook required information if the individuals abstracting the data don’t have an informed sense of what is required for compliance. Failure to properly capture all the relevant data elements can ultimately diminish the value of a company’s financial reporting. Due to this important — and heavy — lift, and despite the deadline delay, getting an early start is key to a private company’s successful adoption.

  It’s worth noting that not all required data elements for effective lease accounting compliance will be found within an organization’s lease agreements. In some cases, only about half of the data will be found within contracts, while the remainder will be contained in other sources and require some level of judgment to establish.

  When private companies begin down the road to lease accounting compliance, they should first reflect on what the required data is and where it can be found within their organization. These answers can be overwhelming, but in this case, knowledge is power. This is because there can be as many as 70 distinct data elements, such as lease terms, payment schedules, end-of-term options and incentives, that need to be identified and captured to be compliant with the lease accounting standards. To properly collect, organize and analyze all the required data, private companies should get ahead of the process and start to prepare now.

  Use A Centralized Data Repository

  Another lesson learned from public companies is the importance of a central lease document and data repository. A 2016 survey by PwC found that 39% of companies manage their lease agreements and related accounting in a decentralized manner. While this approach can work for some, it’s time-consuming and can increase the chance of human error during the data collection process. Public companies that had an organized centralized lease portfolio learned that it saved them time on gathering and analyzing required information, which ultimately saved them money in the long run.

  When setting up a centralized lease portfolio, public companies were able to streamline and optimize global reporting processes and track lease data in real time, which has proven benefits for lease accounting compliance. By having all of the necessary lease data at their fingertips, these organizations experienced a faster, more efficient lease compliance process while also uncovering cost savings including overpayments, unreceived lease incentives and reduced full-time equivalent costs, among others. Not to mention, centralizing leases can be instrumental in supporting a company’s audit process.

  Put Dedicated Teams In Place

  Public companies have also seen the value of having the right people in place:

  • Cross-departmental collaboration: Working with other internal teams on data collection creates visibility across an organization, streamlining the process and positioning the accounting team as a stronger partner to their business.
  • IT assistance: When opting to leverage a centralized data repository or any other dedicated technology, it is critical to enlist one’s IT department from the outset of the project to ensure a smooth implementation, particularly as it relates to the eventual integration with other systems such as an ERP.
  • Dedicated players: Bringing in experienced lease accounting, project management and other expert professionals — whether they’re in-house or outside service providers — can minimize the impact on a company’s other resources.

  While every organization’s lease accounting compliance journey is different, many public companies discovered that some of the most daunting tasks with the new leasing standards were only tangentially related to accounting. Rather, the most significant challenges were in the preparation process. Once private companies get their leases in order and dedicate the time and resources required, they are positioned to better achieve compliance and drive a positive impact on their business’s financial reporting and compliance.

  The post Private market prepares to adopt new lease accounting rules: Lessons learned from public companies first appeared on Visual Lease.]]> https://www.accountingtoday.com/news/gasb-offers-guidance-on-implementing-leases-and-other-standards#new_tab Mon, 14 Jun 2021 19:37:55 +0000 https://visuallease.com/?p=5839 The Governmental Accounting Standards Board released updated implementation guidance for its leases standard, which is going into effect soon, along with other accounting standards for state and local governments.
  The post Article: GASB offers guidance on implementing leases, and more first appeared on Visual Lease.]]> The Governmental Accounting Standards Board released updated implementation guidance for its leases standard, which is going into effect soon, along with other accounting standards for state and local governments.
  The post Article: GASB offers guidance on implementing leases, and more first appeared on Visual Lease.]]> https://visuallease.com/identifying-trends-and-forging-ahead-the-pandemics-impact-on-the-commercial-real-estate-industry/ Thu, 03 Jun 2021 17:21:48 +0000 https://visuallease.com/?p=5800 This article originally appeared here in Forbes. In 2020, many companies were forced to make tough decisions regarding their leased commercial spaces. From office closures to consolidations and deferrals, many...
  The post Identifying trends and forging ahead: The pandemic’s impact on the commercial real estate industry first appeared on Visual Lease.]]>

  This article originally appeared here in Forbes.

  In 2020, many companies were forced to make tough decisions regarding their leased commercial spaces. From office closures to consolidations and deferrals, many of these decisions will have long-term impacts beyond the pandemic. To survive and thrive in today’s new norm, these same companies now need to evaluate how these decisions will continue to affect the leasing landscape, and what that means for their future finances and operations.  

  Lease Market Considerations for 2021 

  Covid-19 had a devastating effect on the real estate market in 2020. As organizations continue to adapt to remote work environments, the trickle-down effects will likely play out over the next few years. Unlike the economic downturn in 2008, the commercial real estate market was in a strong position at the start of 2020 — in fact, it was predicted to grow. However, as tenants struggled to meet their rent obligations, and tenant-landlord tensions and lawsuits ensued, the market quickly took a downward spiral. 

  Despite this negative trend, several bright spots signal recovery within commercial real estate. We surveyed several hundred companies across retail, manufacturing, health care, financial services and more to gain critical insight into how the leasing market has changed since the start of the pandemic and to help organizations to make better-informed business decisions for the year ahead.  

  Revenue Impact of the Pandemic 

  By the end of 2020, nearly three in five respondents to our survey reported a 59% loss of revenue in their business since the start of the Covid-19 outbreak in March 2020. Of those that saw a negative impact on revenue, 80%, fortunately, expect that impact to be short-term. As a result, many organizations are more likely to seek and prioritize opportunities to save money — and leases provide a way for companies to do just that. 

  Over the past year, many organizations made changes to space and equipment leases. However, most still need to get creative and find other ways for monetary gain. PPP loans, insurance policies and lawsuits were some ways that businesses across all sectors chose to subsidize their company’s overhead in the short-term, but these options are now carrying over into 2021. 

  The Future of Office Space 

  To cut additional costs, many have turned to their commercial office leases to identify savings. With the pandemic, there has been a monumental shift in the traditional office space, but most companies are not resolved on what that looks like for their businesses in the future. This year, the industry will need to consider several changes to the office market as they make broader business plans: 

  • Remote work: The acceleration of remote work has shifted the office environment, resulting in widespread downsizing and a decreased demand in the market. Despite this change in behavior, there are now new opportunities for organizations looking to retain office space in major cities, such as opting for smaller regional offices or expanding office space to allow for social distancing.
  • Coworking: Coworking spaces and other short-term rental options may see a rise in popularity as companies continue to explore ways to stay out of the traditional long-term lease options but still provide a home base to employees.
  • Subleasing: In addition to coworking, the sublease market has become larger than it was during the dot-com bubble, providing another flexible lease situation for companies to consider.

  Important Lease Clauses In 2021 

  Lease clauses offer necessary legal protections for both tenants and landlords. However, the onset of the coronavirus pandemic presented unique challenges, which left attorneys scrambling to identify protections for their clients. Many explored force majeure clauses to save costs, only to find that these clauses do not typically extend to pandemics or other public health crises. 

  To date, the biggest impact that Covid-19 has had in the market is that it’s suspended progress on new transactions, and by the end of 2020, global CRE deal volume declined 36% YoY. Tenants have been reluctant to sign new leases and because of this, landlords do not have visibility into the future of their buildings. To add to the lack of certainty, where leases are expiring, others could potentially not be renewed until there is more clarity on their business needs, leading to reduction through attrition in the short-term. As such, new leases should include updated clauses to make new and existing tenants feel comfortable with signing their agreements. Our survey identified the most important lease clauses to consider in today’s environment as flexible termination (34%), specific pandemic force majeure clauses (32%) and shorter lease windows (16%). 

  To effectively navigate today’s commercial real estate landscape, it’s important to recognize that some changes brought on by the pandemic — such as remote work environments and reimagined workspaces — are likely here to stay. Companies will need full visibility into lease terms and options for negotiation and payment to better manage their businesses in this new climate. Flexibility ultimately creates a win-win scenario for tenants and landlords alike in 2021 and beyond. 

  The post Identifying trends and forging ahead: The pandemic’s impact on the commercial real estate industry first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbestechcouncil/2021/05/21/eight-ways-to-find-and-implement-tech-to-support-your-changing-lease-portfolio/?sh=252149e213fc#new_tab Tue, 25 May 2021 17:14:44 +0000 https://visuallease.com/?p=5794 In response to the ongoing effects of Covid-19, businesses across all industries have had to adjust not only their strategies and goals but also their workflow and styles to remain...
  The post Article: Eight ways to find and implement tech to support your changing lease portfolio first appeared on Visual Lease.]]> In response to the ongoing effects of Covid-19, businesses across all industries have had to adjust not only their strategies and goals but also their workflow and styles to remain competitive in their respective markets. As a result, many organizations are exploring and implementing different technology offerings to create advantages for their company and ensure that they remain agile and efficient, even in the most uncertain environments.
  The post Article: Eight ways to find and implement tech to support your changing lease portfolio first appeared on Visual Lease.]]> https://visuallease.com/identifying-the-right-lease-accounting-solution-for-your-business/ Wed, 19 May 2021 16:21:57 +0000 https://visuallease.com/?p=5786 Lease accounting is a massive, cross-functional effort. It involves various stakeholders and systems that impact (and are impacted by) leases. It is not just an accounting problem – and goes...
  The post Identifying the right lease accounting solution for your business first appeared on Visual Lease.]]>

  Lease accounting is a massive, cross-functional effort. It involves various stakeholders and systems that impact (and are impacted by) leases. It is not just an accounting problem – and goes further beyond producing a disclosure report.

  The dynamic nature of leases prompts constant adaptation, and organizations need an easy way to manage those changes. The bigger the portfolio, the more complicated it becomes, which is why it is important to determine how you will handle accurate lease information and financials.

  There needs to be a reliable way to manage leases throughout the year, given lease changes can result in hundreds, potentially thousands of calculations and permutations. While the market offers a wide selection of solutions, not every tool is one-size fits all. Each lease accounting solution offers its own experience – from implementation to daily usage and beyond.

  In this blog, we’ll break down the top differentiating areas and questions you should consider (beyond producing accurate calculations and reports) when evaluating lease accounting software.

  Configurability vs. customization

  Every business is unique with their own processes and leases that contain specific information. Your lease accounting solution should be flexible to match the way you run your business. Weighing the differences between a custom and configurable solution can save you significant time and money.

  • Does the solution require customization for unique business requirements? If so, what are the costs and what is the maintenance associated with customization?
  • Does the solution support configurable data fields, groupings and financial categories to match your industry and organization?
  • Can the solution generate ad-hoc reports on the fly?

  Customer experience

  At the end of the day, your lease accounting solution relies on the people using it. Make sure you are properly set up and running with thorough, dedicated customer support from implementation and beyond.

  • Does the vendor provide in-house, dedicated implementation support?
  • Does the vendor offer ongoing customer support at no additional cost? What are their estimated response time SLAs?
  • Does the vendor provide ongoing trainings and helpful tools dedicated to various users?
  • Is the vendor committed to continuous product enhancements based on customer needs?

  Integrations

  Your lease accounting software should be able to handle even the most complex lease administration and accounting scenarios, including data imports and exports to various third-party solutions for a true return on investment.

  • Does the software integrate with your existing technology infrastructure, such as your ERP and financial systems?
  • Does the software offer flexible options to schedule, monitor, manage and automate data imports and exports between third-party applications?

  Ease of use

  Lease accounting is complex and requires constant adaptation from a variety of stakeholders. You need an easy way to view, track and manage all updates for full auditability.

  • Is the user interface intuitive and easy to use?
  • Does the solution support the ability to view changes made by various users?

  Security

  There is a lot of money – and risk – in most lease portfolios. Make sure you feel confident in your solution’s ability to keep your information safe and generate accurate calculations.

  • Are there tools for administering individual and group users for system access, roles and permissions?
  • Is the solution and calculations backed by a SOC I Type II audit?

  Selecting the right lease accounting solution for your business is critical to your success. Evaluating various tools is a necessary part of the process to ensure you are equipped with what is needed to meet ASC 842, GASB 87 or IFRS 16 compliance.

  If you’re in search of an all-encompassing lease accounting management software that ensures you’re achieving and maintaining compliance, Visual Lease is the solution you’ve been looking for. Schedule a demo with our team to see if we’re a match.

  The post Identifying the right lease accounting solution for your business first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesfinancecouncil/2021/05/11/youve-received-your-annual-management-letter-from-your-auditors---now-what/?sh=17bd22ad16ee#new_tab Tue, 11 May 2021 19:20:45 +0000 https://visuallease.com/?p=5734 For companies that are reporting on a calendar year and have completed their audit, CFOs have recently received or will shortly receive a management letter from their auditors. The management...
  The post Article: You’ve received your annual management letter from your auditors — now what? first appeared on Visual Lease.]]>

  For companies that are reporting on a calendar year and have completed their audit, CFOs have recently received or will shortly receive a management letter from their auditors. The management letter is an integral element of a company’s annual audit process as it highlights key financial findings and provides recommendations for improvements in internal control. It also raises awareness of new accounting pronouncements the company will need to adopt.

  The post Article: You’ve received your annual management letter from your auditors — now what? first appeared on Visual Lease.]]> https://visuallease.com/lease-accounting-pulse-check-how-two-healthcare-organizations-successfully-transitioned-to-asc-842/ Tue, 04 May 2021 19:05:06 +0000 https://visuallease.com/?p=5703 Lease accounting (ASC 842, IFRS 16 or GASB 87) is not your average one-and-done disclosure. This whole new approach to accounting requires you to account for lease changes throughout the year with a higher level of scrutiny.   A...
  The post Lease accounting pulse check: How two healthcare organizations successfully transitioned to ASC 842 first appeared on Visual Lease.]]> Lease accounting (ASC 842, IFRS 16 or GASB 87) is not your average one-and-done disclosure. This whole new approach to accounting requires you to account for lease changes throughout the year with a higher level of scrutiny.  

  A daunting process for many healthcare organizations, lease accounting is a large project that demands cross-functional effort. But with the right preparation, it doesn’t have to be intimidating. 

  In this blog, we share an excerpt from a recent presentation featuring two major healthcare organizations, Penn State Health and Montefiore Health System, where they share how they transitioned to ASC 842 and maintained lease accounting compliance throughout the year. 

  Featured Speakers:

  

  Joe Fitzgerald, Visual Lease: 

  Leases are inherently cross functional. There are many stakeholders involved with leasing, each with their own processes, systems and silos – (such as brokers, procurement, legal operations, accounting, tax, IT, you name it). 

  You need to make sure you’re maintaining an accurate audit trail and implementing guardrails so the changes being made by everybody are by the book. 

  What are some of Penn State Health’s considerations regarding cross–functional changes that affect accounting? 

  James Rogers, Penn State Health: 

  A lot of times, we found it’s believed that [lease accounting] is just a finance function. But finance relies heavily on supply chain, real estate and other departments when identifying leases. 

  To successfully work cross-functionally, we’ve set in place processes and policies, including ongoing communication between the real estate lease coordinators and finance – built around our Visual Lease solution. 

  You really have to take some time determining those policies and procedures because the process flow or the workflow will inevitably change with this new guidance, and you will as a finance department be leaning on this to help you stay compliant. 

  Joe Fitzgerald: 

  Two words come to mind, they both start with C – cooperation and collaboration. How about at Montefiore? 

  Fred Berardinone, Montefiore Health System: 

  Exactly, very similar to James. The importance of us leveraging automated lease accounting software was to have a centralized lease management system that we can build workflows according to our policies.  

  Similar to James, it’s all really finance’s domain, we would say liaison in this. But once again, this goes back to all the parties involved. 

  It’s really building the automation from the front end, from the data abstraction to Visual Lease or whatever software that whoever goes with, and into the general ledger and into accounts payable, and it’s all really getting blessed through least admin and finance.  

  So just as James mentioned, it’s really building that workflow, building those policies and procedures, and we still go back and test them, we’ll go back. We had internal audit actually take a look at our policies too, just verify that that’s how the system was working.  

  Joe Fitzgerald: 

  It sounds like what you both did at the start of the project in terms of working with the other folks has really paid off as you move forward in terms of cooperation and collaboration, that’s great. 

   

  To hear more about how Penn State Health and Montefiore Health System successfully use software to get and maintain audit-ready with lease accounting requirements, check out the full panel session here.

  

  The post Lease accounting pulse check: How two healthcare organizations successfully transitioned to ASC 842 first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesrealestatecouncil/2021/04/27/pandemic-impact-understanding-utilizing-and-capturing-important-lease-clauses/?sh=3be698d7237c#new_tab Wed, 28 Apr 2021 15:56:21 +0000 https://visuallease.com/?p=5699 It’s been just over a year since the U.S. experienced a series of lockdowns in response to the Covid-19 pandemic. Lessees and lessors have had to quickly adjust their strategies to...
  The post Article: Pandemic impact: understanding, utilizing and capturing important lease clauses first appeared on Visual Lease.]]>

  It’s been just over a year since the U.S. experienced a series of lockdowns in response to the Covid-19 pandemic. Lessees and lessors have had to quickly adjust their strategies to adapt to unforeseen circumstances such as office closures, restaurant shutdowns and low foot traffic at retail locations. Today, both parties are looking for added assurance when updating existing lease agreements or entering into new ones.

  The post Article: Pandemic impact: understanding, utilizing and capturing important lease clauses first appeared on Visual Lease.]]> https://www.financialexecutives.org/FEI-Daily/March-2021/What%E2%80%99s-Going-on-with-my-Real-Estate-Operating-Expe.aspx#new_tab Fri, 02 Apr 2021 19:26:58 +0000 https://visuallease.com/?p=5648 Landlords and tenants are struggling to reconcile 2020 building operating expenses and service charges in an atmosphere of highly irregular occupancy and operational adjustments.
  The post Article: What’s going on with my real estate operating expenses? The experts weigh-in first appeared on Visual Lease.]]>

  Landlords and tenants are struggling to reconcile 2020 building operating expenses and service charges in an atmosphere of highly irregular occupancy and operational adjustments.

  The post Article: What’s going on with my real estate operating expenses? The experts weigh-in first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesfinancecouncil/2021/03/29/private-market-prepares-to-adopt-new-lease-accounting-rules-lessons-learned-from-public-companies/?sh=62e5b45e2419#new_tab Tue, 30 Mar 2021 19:09:57 +0000 https://visuallease.com/?p=5643 With the ASC 842 deadline for private companies looming, there are several things private organizations can do to set themselves up for success.
  The post Article: Private market prepares to adopt new lease accounting rules: lessons learned from public companies first appeared on Visual Lease.]]>

  With the ASC 842 deadline for private companies looming, there are several things private organizations can do to set themselves up for success.

  The post Article: Private market prepares to adopt new lease accounting rules: lessons learned from public companies first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesrealestatecouncil/2021/03/24/14-ways-tech-integration-can-impact-commercial-real-estate-operations/?sh=625ef28e3f6a#new_tab Thu, 25 Mar 2021 15:47:10 +0000 https://visuallease.com/?p=5639 Real estate, as an industry, has been more accepting of technology’s benefits to the trade in recent years. A growing number of real estate companies and professionals have embraced tech...
  The post Article: 14 ways tech integration can impact commercial real estate operations first appeared on Visual Lease.]]>

  Real estate, as an industry, has been more accepting of technology’s benefits to the trade in recent years. A growing number of real estate companies and professionals have embraced tech to a large degree, resulting in improved operations.

  The post Article: 14 ways tech integration can impact commercial real estate operations first appeared on Visual Lease.]]> https://visuallease.com/incremental-borrowing-rate-what-you-need-to-know-for-lease-accounting/ Mon, 22 Mar 2021 14:00:21 +0000 https://visuallease.com/?p=5631 Among the many different calculations used in lease accounting, the incremental borrowing rate may be one of the most misunderstood. The incremental borrowing rate (IBR) is the interest rate a lessee would...
  The post Incremental borrowing rate: what you need to know for lease accounting first appeared on Visual Lease.]]>

  Among the many different calculations used in lease accounting, the incremental borrowing rate may be one of the most misunderstood. The incremental borrowing rate (IBR) is the interest rate a lessee would have to pay to borrow funds to finance an asset similar to the lease’s ROU asset in value, over a similar term and in a similar economic environment. 

  And according to FASB ASC 842, lessees are now allowed to use the incremental borrowing rate to determine the discount rate used to measure their leases. 

  Let’s take a closer look at when and how to use the incremental borrowing rate in lease accounting. 

  When is the incremental borrowing rate used in lease accounting? 

  All the latest lease accounting standards, including ASC 842, require lessees to determine a reasonable discount rate for establishing the Net Present Value (NPV) of all their future lease payments. Lessees then use the NPV as the basis for determining the different components of lease schedules, including lease liabilities, ROU assets and amortization. 

  However, the accounting board also acknowledges the discount rate is not always easy to determine. In many leases, the rate is not clearly spelled out (explicit) or the information that could be used to determine the (implicit) discount rate may be missing or incomplete. 

  For instance, a lease might not specify an interest rate used to calculate the payments or the residual value at the end of the lease might be subject to change. 

  Therefore, ASC 842 guidelines allow lessees to use the incremental borrowing rate as an alternative method for determining the discount rate when they don’t have access to all the information (explicit or implicit) used to determine lease payments. 

  Why is IBR so important in lease accounting? 

  The incremental borrowing rate is used to discount future cash flows to reflect the impact of time on the remaining lease obligation. 

  For instance, on a lease with payments of $1,000 a month for five years, the organization’s lease accounting needs to recognize not only current payments but also what will be paid in the future, using the IBR to reflect the timing of individual cash flows. 

  Using the IBR as the discount rate has a tremendous impact on an organization’s balance sheet. That is because every piece of data in a lease schedule is generated off the NPV, which is determined by the discount rate — in this case, IBR — and the date and amount of each lease payment. 

  How is the incremental borrowing rate determined? 

  An organization’s incremental borrowing rate is generally a reflection of its creditworthiness based on two components: 

  • The risk-free rate, determined by the current rate on Treasury bills (T-bills) 
  • The individual organization’s specific credit rating

  The current risk-free rate for different term lengths can be found in trusted sources such as the Treasury Department website or publications such as Bloomberg or the Wall Street Journal.  

  Ideally, the IBR should also consider an organization’s current credit rating, including its debt structure and capital. This is especially true with real estate and other high-value leases. 

  For instance, a small startup company may pose more of a credit risk and therefore pay a higher IBR on real estate leases compared to a larger and more established company. 

  In addition, determining the incremental borrowing rate is often more difficult for a private organization than for a public company. 

  How is IBR different for public and private companies? 

  Public companies typically know what their IBR is, due to the ongoing financial tracking and reporting required from publicly traded companies. By necessity, these organizations usually know their average cost to capital, borrowing interest rates and other factors that affect their credit. 

  Private companies are less likely to know those factors and may not have up-to-date credit information readily available. Instead, they may have to pick a theoretical IBR based on a wide range of issues such as: 

  • The interest rate paid the last time they borrowed money 
  • How much above the risk-free rate they are likely to pay 
  • The type of asset — for example, the interest on financing a vehicle vs. financing a building 
  • Whether the asset will depreciate or appreciate 
  • The length of time over which payments will be made 
  • The organization’s borrowing activity and credit risk 
  • Market conditions and borrowing costs 

  Therefore, for simplicity, private companies often opt to use the risk-free rate as their IBR — for example, basing the IBR for a five-year lease on the rate at which five-year T-bills are currently trading.  

  What is the impact of using the risk-free rate as your IBR? 

  Looking up the risk-free rate and using it as an organization’s incremental borrowing rate is certainly easy. However, it will inflate the organization’s liabilities. 

  The risk-free rate is always the lowest borrowing rate, minus the inflation expectation. But when factored over time, the lower the interest rate is, the higher the NPV will be. That means the risk-free rate has a larger impact on the balance sheet. 

  Therefore, while it is less work to use the risk-free rate, it may not be as advantageous as determining your actual incremental borrowing rate. 

  When must the incremental borrowing rate be updated? 

  The good news is ASC 842 says once a lease schedule is established, you don’t need to recalculate the discount rate unless you need to remeasure future lease obligations due to changes such as: 

  • Renewals or options that add time and payments to a lease 
  • Abatements or other modification of existing leases 

  For example, if you decide to exercise an option for a new five-year term on an existing lease, you will want to calculate the additional time and payments at a current rate rather than use the rate established at the start of the original lease. 

  However, it is important to stay up to date on inflation expectations and market rates, as well as the organization’s current credit standing. That way, if and when lease remeasurements are needed, the organization will be prepared to recalculate its IBR. 

  IBR is simpler with lease accounting technology. 

  To the extent you can determine the discount rates used to calculate lease payments, you should use those rates in your lease accounting. But when you cannot reasonably determine a discount rate, the incremental borrowing rate is a quick and easy alternative allowed by ASC 842. 

  Determining the incremental borrowing rate is a complex issue, and there is no simple formula. However, a lease technology solution like Visual Lease makes it easy to manage and track borrowing rates. 

  For instance, the platform’s Borrowing Rate table lets you establish a series of IBRs based on type of asset, organization credit rating, country, currency and the remaining lease term. 

  With all the necessary values in one place, you can easily track and modify the data points as needed. In addition, when you create a lease schedule, the Visual Lease platform will automatically select the appropriate rate based on the parameters you set up in the table. 

  To learn more, contact us at (888) 876-6500 or request a demo to see Visual Lease in action. 

  The post Incremental borrowing rate: what you need to know for lease accounting first appeared on Visual Lease.]]> https://www.cpapracticeadvisor.com/accounting-audit/news/21210076/2020-operating-expenses-an-unconventional-convention#new_tab Fri, 19 Mar 2021 14:30:15 +0000 https://visuallease.com/?p=5628 Commercial real estate overhead has never faced more scrutiny. While today’s highly agile workforce brings with it a newfound level of productivity, there are various impacts and considerations felt across...
  The post Article: 2020 operating expenses – an unconventional convention first appeared on Visual Lease.]]>

  Commercial real estate overhead has never faced more scrutiny. While today’s highly agile workforce brings with it a newfound level of productivity, there are various impacts and considerations felt across a business.

  The post Article: 2020 operating expenses – an unconventional convention first appeared on Visual Lease.]]> https://www.financialexecutives.org/FEI-Daily/March-2021/Proposed-Extension-for-IFRS-16-How-COVID-19-is-St.aspx#new_tab Thu, 18 Mar 2021 14:49:34 +0000 https://visuallease.com/?p=5626 These are the considerations that financial professionals should keep in mind to ensure they are prepared for changes that may emerge due to COVID-19.
  The post Article: Proposed extension for IFRS 16: how COVID-19 is still impacting lease accounting standards first appeared on Visual Lease.]]>

  These are the considerations that financial professionals should keep in mind to ensure they are prepared for changes that may emerge due to COVID-19.

  The post Article: Proposed extension for IFRS 16: how COVID-19 is still impacting lease accounting standards first appeared on Visual Lease.]]> https://visuallease.com/deferred-rent-accounting-101-for-asc-842-and-asc-840/ Wed, 10 Mar 2021 14:05:54 +0000 https://visuallease.com/?p=5645
  

  What is Deferred Rent Under ASC 842? 

  In lease accounting, deferred rent happens when the cash rental payment varies from its expense recognized on the financial statements and occurs when the tenant is provided free rent in one or more periods, or if there are escalating rent payments. Here is everything you need to know about deferred rent under ASC 840 and ASC 842 rules. 

  Is Deferred Rent an Asset or Liability? 

  Deferred rent is a balance sheet account traditionally used in legacy accounting standards as defined in ASC 840. Deferred rent arises when the amount expensed exceeds the amount paid. A balance will build up and then burn off when the cash paid exceeds the amount expensed.

  ASC 842 requires the total rent expense to be recognized on a straight-line basis during the lease period even if rent payments differ. The debiting or crediting of the deferred rent account monthly allows the lessee to record the rent expense using the straight-line basis and catch whatever difference is between the amount paid and the expense recognized in this account. The cumulative balance of the deferred rent when the lease is terminated has to be equal to zero. 

  Where is Deferred Rent on the Balance Sheet? 
  Deferred rent journal entries are liabilities on the balance sheet and occur when rent payments are lower than the straight-line rent expense. 
  What is the Accounting for Deferred Rent? 

  Accounting for the free rent period and subsequent periods are as follows: 

  Add the total cost of the rent payments for the entire lease period. Then divide this total amount of payments by the total number of periods in the lease, including any early access period. So although the first month was technically “free,” we still have a payment that appears on our balance sheets.

  ASC 842 Deferred Rent Example

  If the lease term is one year with the first-month rental being free and the rental rate for the coming months being $1,000, then the total rental cost will be $11,000 .

  Divide the total rental cost by the total number of periods in the lease contract including the free rental month. In our example, we will divide $11,000 by 12 months and get $917. 

  Each month of the lease, the average monthly rate should be charged as an expense, regardless of whether there was an actual payment made. In our example, the expense for the first month is $917 even if there is no actual payment since the tenant did not pay for the first month. This means that the $917 debited to expenses is offset by a credit to the deferred rent account. 

  For the remaining months of the lease, the same average amount should be charged as an expense. This is $917 in our example. Should there be an offsetting of the rental payment and if the payment and expense don’t match, then the difference should be applied to the deferred rent account. 

  In our example, the monthly payment for the remaining period after the free month has lapsed is still $1,000, an amount that’s higher by $83 than the amount charged as rent expense, which is $917. This difference should be used to reduce the amount of the deferred rent liability during the remaining months of the rental period until it becomes zero. 

  The same accounting approach should be used even if the rental amount changes throughout the lease period. For example, if the lease rate increases in the succeeding months, then the average rent expense should be charged in all months with a portion of it forming part of the deferred rent liability. 

  What is the Difference Between Prepaid Rent and Deferred Rent? 

  There’s a difference between deferred rent vs. prepaid rent. The former is a liability and occurs when the lessor provides free rent, usually at the start of the lease term, or there are escalating rent payments. Prepaid rent is rent paid up front that is to be expensed in a future period. 

  How ASC 842 Transition Affects Deferred Rent Accounting 

  The concept of straight-line rent expense on operating leases was retained despite the transition to the ASC 842. But under the new mechanics, the deferred rent should be replaced by the Right of Use (ROU) asset and lease liability accounts. The ASC 842 guidelines are much more complicated than its predecessor, ASC 840. Thus, any lease accounting software must have ROU Asset functionality in place. It is best to go for trusted accounting software such as ours. 

  At Visual Lease, we make compliance to ASC 842 and other standards a breeze
   To learn more about how Visual Lease can help your business contact us now.
  Learn More
  
  The post Deferred rent accounting 101 for ASC 842 and ASC 840 first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesrealestatecouncil/2021/03/08/identifying-trends-and-forging-ahead-the-pandemics-impact-on-the-commercial-real-estate-industry/?sh=55a7af216a21#new_tab Tue, 09 Mar 2021 16:22:43 +0000 https://visuallease.com/?p=5607 To survive and thrive in today’s new norm, these same companies now need to evaluate how these decisions will continue to affect the leasing landscape, and what that means for...
  The post Article: Identifying trends and forging ahead: the pandemic’s impact on the commercial real estate industry first appeared on Visual Lease.]]>

  To survive and thrive in today’s new norm, these same companies now need to evaluate how these decisions will continue to affect the leasing landscape, and what that means for their future finances and operations.

  The post Article: Identifying trends and forging ahead: the pandemic’s impact on the commercial real estate industry first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesrealestatecouncil/2021/02/04/uncover-an-unlikely-profit-center-transforming-lease-compliance-into-savings-opportunities/?sh=2e9c77f5a0d8#new_tab Thu, 04 Feb 2021 15:00:21 +0000 https://visuallease.com/?p=5484 This past year, organizations across the globe have faced unprecedented challenges as they navigate new business models and virtual work environments. For many, it’s been a race against the clock...
  The post Article: Uncover an unlikely profit center: transforming lease compliance into savings opportunities first appeared on Visual Lease.]]>

  This past year, organizations across the globe have faced unprecedented challenges as they navigate new business models and virtual work environments. For many, it’s been a race against the clock to find and implement technology that will allow them to survive and thrive in this new era.

  The post Article: Uncover an unlikely profit center: transforming lease compliance into savings opportunities first appeared on Visual Lease.]]> https://www.globest.com/2021/01/28/wfhs-sheen-wears-off-for-some-large-companies/#new_tab Thu, 04 Feb 2021 14:56:18 +0000 https://visuallease.com/?p=5482 Another day, another breathless survey repeating what we’ve been hearing for the last year: work-from-home is more than just a passing trend, and it just may be here to stay....
  The post Article: WFH’s sheen wears off for some large companies first appeared on Visual Lease.]]>

  Another day, another breathless survey repeating what we’ve been hearing for the last year: work-from-home is more than just a passing trend, and it just may be here to stay. But NABE data show that a mere 11% of panelists expect all employees to return to a physical office.

  The post Article: WFH’s sheen wears off for some large companies first appeared on Visual Lease.]]> https://www.globest.com/2021/01/26/54-of-office-tenants-received-rent-relief-from-landlords-last-year/?slreturn=20210028111645#new_tab Thu, 28 Jan 2021 16:26:46 +0000 https://visuallease.com/?p=5439 Commercial office leases were on the chopping block last year as companies grappled with the impacts of COVID. Of the companies surveyed in a new Visual Lease report, 50% received...
  The post Article: 54% of office tenants received rent relief from landlords last year first appeared on Visual Lease.]]>

  Commercial office leases were on the chopping block last year as companies grappled with the impacts of COVID. Of the companies surveyed in a new Visual Lease report, 50% received some kind of monetary relief, with the majority of assistance coming from Paycheck Protection Program loans, leveraged insurance policies and lawsuits.

  The post Article: 54% of office tenants received rent relief from landlords last year first appeared on Visual Lease.]]> https://www.corporatecomplianceinsights.com/proposed-fasb-changes-lease-accounting-compliance/#new_tab Tue, 22 Dec 2020 17:09:34 +0000 https://visuallease.com/?p=3777 How has COVID-19 impacted the road to compliance and the accounting industry? Visual Lease’s Joe Fitzgerald discusses why FASB has proposed new changes to its lease guidelines and what it...
  The post Article: Proposed FASB changes and the road to lease accounting compliance first appeared on Visual Lease.]]>

  How has COVID-19 impacted the road to compliance and the accounting industry? Visual Lease’s Joe Fitzgerald discusses why FASB has proposed new changes to its lease guidelines and what it means companies on their compliance journey.

  The post Article: Proposed FASB changes and the road to lease accounting compliance first appeared on Visual Lease.]]> https://visuallease.com/why-roll-forward-reports-are-essential-for-lease-accounting/ Tue, 15 Dec 2020 20:16:10 +0000 https://visuallease.com/?p=3746   Table of Contents What is a roll-forward report? The importance of roll-forward reports Roll-Forward Reports: Meeting Lease Accounting Standards The advantages of roll-forward reports Creating Comprehensive Roll-Forward Reports Why...
  The post Why roll-forward reports are essential for lease accounting first appeared on Visual Lease.]]>

   

  Table of Contents

  • What is a roll-forward report?
  • The importance of roll-forward reports
  • Roll-Forward Reports: Meeting Lease Accounting Standards
  • The advantages of roll-forward reports
  • Creating Comprehensive Roll-Forward Reports
  • Why use roll-forward reports?

  The new lease accounting standards include a variety of disclosure reports to give financial auditors visibility into an organization’s leasing activities. Although the standards do not explicitly mention roll-forward reporting, they do require companies to explain changes to leases on the balance sheet disclosing not only amounts gained or lost, but also why those gains or losses occurred.

  What is a roll-forward report?

  Roll-forward reports are a valuable tool for meeting this lease accounting requirement. They provide a detailed explanation of lease financials including period over period changes to right-of-use (ROU) assets, as well as short-term and long-term liabilities.
  What makes roll-forward reports so valuable for lease accounting and compliance?

  The importance of roll-forward reports

  If lease activity remained the same over time ,it would besimple to show amortization of ROU assets and liabilities , with schedules specifying asset and liability reductions in each period.

  The challenge is that ,in reality, a company’s leases and liabilities are always changing due to events such as:

  • New leases or transitions
  • Modifications
  • Impairments
  • Terminations
  • Regular amortization

  Roll-Forward Reports: Meeting Lease Accounting Standards

  To comply with the latest lease accounting standards, accounting must accurately and thoroughly report all those changes, including lease additions or subtractions as well as the reasons why those changes occurred.

  Forexample:

  • If a company needs to book a loss onan impaired asset ,the lease accounting is required to show the details including the corresponding reduction in the ROU asset.
  • If a company received rent abatements and decided to treat them as remeasurement events rather than variable rent expenses, the lease accounting must clearly reflect the resulting amounts and how and why the company calculated them.

  Roll-forward reports are an effective method for disclosing these and other changes that occur in the life of company’s leases.

  The advantages of roll-forward reports

  Theroll-forwardreport ingconcept issimilar toa statement of cash flows, which reconcile the differences between the cash position on the balance sheet and on the P&L statement.

  A roll-forward report does the same thing, but forleases—provid inga window into an organization’s lease portfolio, activities and business decisions, including why there are additions or subtractions in lease financials. For instance, a report may show a large change in liability but also reveal it is offset by additional lease assets.

  In addition, r oll-forward report sare a vehicle for separating finance lease s fromoperating leasesas required forASC 842compliance. The reports can also segregate and report lease information according to asset classes.

  Creating Comprehensive Roll-Forward Reports

  1. Data Accuracy

  Roll-forward reports outline the changes in your balance sheet period over period. Therefore, the first step to a roll-forward report is to ensure your lease information is accurate, up tod ate andc omplete .

  2. Multiple Data Sources and Locations

  Roll-forward reports ofteninclude leaseinformationcollectedfrom multiple sources ,such as the different departments responsible for real estate, office and IT equipment, vehicles and other assets. Data gathering may also involve individual locations in different cities, states, regions or countries.

  3. Tailoring Reports to Fit Your Needs

  The information with in roll-forward reports will vary depending on company structure, assets, and accounting and reporting needs. An example, you might create a report for the entire lease portfolio — or fora single asset, a particular department within the company, a sub-organization within a multi-national corporation or an asset class(such as real estate or equipment).

  4. Elements of an Informative Roll-Forward Report

  To be truly beneficial, the report must explain why changes happened in lease financials, as well as the amounts. Therefore, roll-forward reports for a ROU asset or a short- or long-term liability typically include the following:

  • Beginning balance
  • Additions—including new leases, transitions and modifications
  • Deductions—including modifications, impairments, terminations and amortizations
  • Recalculatede ndingb alance— including the mathematical formula
  • Ending balance comparison for the period
  • Total liability balance

  5. Transaction Classification

  The roll-forward report should classify each transaction by asset type and include payments, amortization and interest. Where companies have a classified balance sheet, they should report bothshort-term and long-term liabilities, including monthly reclassifications or, if payments are not monthly, interest accruals.

  Why use roll-forward reports?

  Roll-forward reports are an important tool for both lease accounting compliance and ongoing lease visibility. They enable financial statement users to easily view lease changes, the reasons behind themand their impact, all in one report.

  By implementing a technology platform that automates roll-forward reporting, organization scan streamline information gathering, calculations and reporting while ensuring that the process meets compliance requirements.

  Visual Lease’s industry-leading lease accounting platform supports roll-forward reporting for better validation and transparency . The platform ’s roll-forward report capabilities provide userswithaclearunderstanding of lease changes and how they impact the business . Users may easilyviewall the supporting data and leaseactivity right within the platform. Visual Lease canalsoautomatically separate financeandoperating leases for compliance with ASC 842 .

  To learn more, watch our on-demand webinar Roll-Forward Reports: When to Do it, How to Do it, and How to Automate It .

  The post Why roll-forward reports are essential for lease accounting first appeared on Visual Lease.]]> https://visuallease.com/visual-lease-launches-the-integrations-hub-providing-powerful-flexible-open-access-to-lease-data/ Thu, 10 Dec 2020 21:24:33 +0000 https://visuallease.com/?p=3733 Lease portfolios often account for a massive portion of a company’s risk exposure and overhead. And yet, most businesses lack visibility into their leases to understand their obligations and options – and...
  The post Visual Lease launches the integrations hub, providing powerful, flexible & open access to lease data first appeared on Visual Lease.]]> Lease portfolios often account for a massive portion of a company’s risk exposure and overhead. And yet, most businesses lack visibility into their leases to understand their obligations and options – and make agile decisions as their businesses grow.

  There are several reasons for this:

  Leases are complex, constantly evolving agreements with high-stakes terms often buried in the contracts. Managing leases can be difficult due to data silos and distributed responsibilities across operations, real estate and accounting teams. This means there’s a lot of room for crossed wires, missed deadlines and costly mistakes.

  Lease accounting compliance brought the pressing need for lease portfolio management to light. When FASB announced ASC 842, several solutions flooded the market to solve this problem. However, not all of them could.

  Technology that attempts to do it all (lease administration, business intelligence, accounts payable, etc.) generally does not. Often, efficiencies promised within all-in-one solutions are lost to mediocre functionality and execution. This is especially true in a software category as new as lease accounting.

  The stakes are too high to take chances. Companies require specialized lease administration and accounting tools, and they need those tools to seamlessly integrate into their processes and technology stacks at each stage of the lease lifecycle.

  How to Optimize the Lease Lifecycle

  From sourcing to contract negotiation to termination, there’s a lot that goes into the lifecycle of the lease – and each stage is dependent on the last.

  • Procurement decisions are better when you have informed analytics on asset utility.
  • Lease accounting reports are better when you have all your lease management information centralized and accessible.
  • It’s easier to manage your leases when you can easily reference important clauses and deadlines embedded in contracts.

   

  

  There are countless software and service providers dedicated to streamlining every stage of a lease. But they can only maintain accuracy if data flows between them securely, automatically and asynchronously.

  

   

   

  With the right solution for each facet of your business and a secure, flexible tech stack, companies can leverage their leased properties and equipment as strategic financial assets vs. overhead expenses.

  Integrations are the key to connect those solutions, drive efficiency and unlock insights and financial opportunity.

  Introducing the Integrations Hub, a powerful new way to automate workflows, unlock insights and achieve end-to-end compliance across your lease portfolio and your business.

  The Integrations Hub offers flexible, open platform access to any third-party application. Users can simply schedule, monitor, manage and automate data imports and exports to and from Visual Lease at any time. (Think of it as a lease lifecycle electrical socket, allowing you to supercharge your tech stack with a simple plug-in.)

  Given the complexity and often customized configurations in accounting technology, a one-size-fits-all API isn’t enough. We believe there is no such thing as a silver bullet integration – whether it’s built by us or anyone else.

  With the Integrations Hub you’ve got more options to leverage your lease data, including:

  • Low-maintenance Managed File Transfers for schedule automated data imports and exports
  • An accessible Developer Portal with a comprehensive REST API Library enabling customized, real-time data connectors. With just a few lines of code, a developer can access accurate data along with powerful and complex processes in a repeatable way.
  • Track every transfer in real-time with the integrations hub Dashboard to cat ensure data integrity and auditability.

  It’s all backed by the industry’s most informed and experienced professional services team.

  Imagine the possibilities:

  • Align every line in your general ledger by connecting journal entries from Visual Lease or tracking payment information in accounts payable.
  • Convert currencies across continents by plugging in currency rate tables to Visual Lease for always-accurate calculations, no matter the location.
  • Inform Business Intelligence by surfacing the right data at the right time in the system and format where it’s most helpful.

  The technology team at Newmark was instrumental in helping us build and test this new technology, and they’re already using the Integrations Hub to leverage lease data across their tech stack.

  Newmark is a Visual Lease customer and a leading commercial real estate firm that provides a fully integrated platform of services to prominent multinational corporations and institutional investors across the globe.

  The technology team at Newmark was instrumental in helping us build and test this new technology, and they’re already using the Integrations Hub to connect lease data to their Business Intelligence tool, NavigatorCRE.

  According to Carla Hinson, Newmark’s Executive Managing Director, Global Technology, this opens up possibilities.

  

  At our live launch event, Hinson sat down with Bobby Paulus, Visual Lease’s Director of Strategic Alliances, to talk through her experience getting Newmark’s integrations set up, the value they’re are already experiencing and what’s next on their roadmap. To listen to the full conversation, watch the event recording.

  If you’re ready to supercharge your tech stack– and integrate your lease data across systems, we’re excited to help you get you plugged in. Check out this page on our website for more information.

  The post Visual Lease launches the integrations hub, providing powerful, flexible & open access to lease data first appeared on Visual Lease.]]> https://www.accountingweb.com/aa/standards/covids-impact-on-fasb-proposed-changes#new_tab Fri, 04 Dec 2020 16:01:36 +0000 https://visuallease.com/?p=3700 As the accounting profession navigates the challenges brought on by COVID-19, FASB shifted the deadline to grant private companies more breathing room to achieve compliance with its major lease accounting...
  The post Article: COVID’s impact on FASB proposed changes first appeared on Visual Lease.]]>

  As the accounting profession navigates the challenges brought on by COVID-19, FASB shifted the deadline to grant private companies more breathing room to achieve compliance with its major lease accounting standards, including ASC 842, and recently released proposed changes to its lease guidance – some of which are a direct result of the pandemic.

  The post Article: COVID’s impact on FASB proposed changes first appeared on Visual Lease.]]> https://visuallease.com/how-to-solve-for-the-top-asc-842-lease-accounting-challenges/ Mon, 23 Nov 2020 19:25:02 +0000 https://visuallease.com/?p=3680 How to Abstract, Manage and Report on Lease Data  When FASB issued its update to the lease accounting standard, the main goal was to increase the transparency and comparability of financial reporting.  ...
  The post How to solve for the top ASC 842 lease accounting challenges first appeared on Visual Lease.]]>

  How to Abstract, Manage and Report on Lease Data 

  When FASB issued its update to the lease accounting standard, the main goal was to increase the transparency and comparability of financial reporting.  

  Unfortunately, there are many complex decisions and actions required to successfully achieve compliance. You’ll want to make sure to provide yourself with enough time and resources to get it done right. 

  Fortunately, you’re not alone – and hundreds of public and private companies have already gone through this process. With proper insight into common potential obstacles, you can more clearly navigate through the process and achieve success. 

  While there is certainly no shortage of difficult tasks to achieve compliance, we’ve narrowed down the top 4 common lease accounting challenges experienced by public companies – and how to solve them.  

   

  Challenge 1: Centralizing all leases in one place   

  A crucial first step in the transition to ASC 842 is to identify all leases held by an organization and enter the pertinent information in one location. 

  To do so, you will need to start by gathering each lease within your organization, including any leases that may be part of a contract, such as an embedded lease. This effort requires careful analysis and judgment – and typically involves extensive coordination across departments and business units to ensure all leases are included.  

  Often a time-consuming and cumbersome exercise, it is crucial to provide your organization with ample time to complete this step. (For help with your project timeline, request a customized milestone planner to outline when to begin).  

  Once all the leases within your company have been identified, you’ll need to import important lease information into a centralized location to help you view all your leases in one place and access lease information at any time. 

  This step often contains a high volume of labor-intensive work. Extracting lease data (also known as abstracting) from complicated contracts is a complex task that will need to be done for every lease – and any time your company signs new leases and modifies existing lease contracts.  

  Depending on the size of your company and resources available, you may need to assess whether it is better to perform this this task in-house or with external professional abstracting resources.

   

  Challenge 2: Identifying technology that does more than calculate  

  Your chosen lease accounting technology is just as critical to the lease accounting standard transition and will greatly impact your ongoing ASC 842 compliance.  

  While some solutions may sound similar on paper, only a select few are able to provide you with the proper tools to ensure your company’s lease information is accurate at the get-go, and remains up-to-date over time with minimal effort. 

  If you are in the market for a system, don’t settle for any solution that promises to produce accounting calculations. You’ll need to make sure it also makes it easy to facilitate ongoing, long-term compliance by properly tracking lease updates. 

  From the start, look for a tool that can deliver the following: 

  • System Integration Capabilities: Lease accounting data should be able to easily integrate into necessary third-party applications to further automate of journal entries, financial disclosures and accounts payable information. Previously, many companies did not pay attention to integrating their leases within their accounts payable system, but with the advent of the new standard, your business may benefit from re-examining its payment processes through a solution that facilitates integration between accounts payable and the lease information. 
  • Lease Management Features: Ensure up-to-date lease information with a tool that makes it easy to track and manage leases on an ongoing basis. With lease information that is searchable and available at a glance, your business can stay on top of payments, renewals and options, as well as compliance requirements. 
  • Modern Software Updates: Don’t get stuck using a system that doesn’t prioritize developing new features and capabilities. To keep up with the most current trends in lease accounting, you’ll want to make sure your chosen system is dedicated to helping you achieve your goals and saving you time by releasing new innovative features and functionality. 

  Save yourself the trouble and inefficiencies of a tool that under–promises its ability to deliver what you need – and more importantly, consider the long-term impact of lease accounting software to avoid having to start all over again after you’ve already done the hard work of preparing for the lease accounting deadline. 

   

  Challenge 3: Making critical decisions that impact business financials 

  In the early stages of transitioning to ASC 842, there are a number of essential, albeit challenging decisions that companies are responsible for, which impact overall lease accounting and reports. 

  • Applying the ASC 842 Guidance: When transitioning to the new standard, companies can elect one of two approaches to apply the guidance: 
  • • Most commonly, you can retrospectively apply the guidance at the beginning of the period of adoption through a cumulative-effect adjustment, known as the modified retrospective approach. In this approach, you no longer are responsible for capturing leases you no longer hold. However, this option presents its own challenges, requiring all lease data to be current and up to date. 
  • • Uncommonly, you can retrospectively apply the guidance to each prior reporting period presented in your financial statements along with the cumulative effect of the initial application, to the earliest period presented. In this approach, you are restating prior periods as the standard had applied to them, which presents an enormous challenge to recalculate and apply the current standard to leases you no longer hold. 
  • Determining Discount Rates: Companies need to exercise judgment when determining their discount rates. The elected discount rate can have a substantial impact on your balance sheet. 
  • • For lessees, if the discount rate is clearly stated within a lease – called an explicit rate – the lessee is required to use that. However, it is rare for a lease to include this – and nearly impossible to calculate without it. To do so, the lessor would need the lessor’s financial information to determine this discount rate. 
  • • If that rate cannot be easily determined, companies can use the incremental borrowing rate (IBR). The IBR is the rate you would have to pay or borrow on a collateralized basis over a similar term. While this is a more common option to select, it also presents its own challenges. IBRs are often easier for big companies, but more difficult for private companies. However, it’s common for private companies to pick a risk–free rate.  
  • Payments and Allocations: When calculating lease liability, companies must decide whether to consider renewal periods and termination periods, which ultimately impact the length of liability (and financial obligation) in financial reports.  
  • • You may also choose to allocate lease payments between lease components and non-lease components, depending on what practical expedients (see below) your company has elected.  
  • Policy Elections: When choosing policy elections, it’s important to consider the current policies and types of lease contracts.  
  • • Selecting policy elections help to determine the broader impact, rather than just the immediate impact on your financials.  
  • Disclosure Requirements: While the new standard includes quantitative and qualitative disclosure requirements, companies are responsible for more than the minimum reports documented in the guidelines. 
  • • Company management needs to consider the disclosure requirements within existing lease contracts and plan how to gather the relevant disclosure information. Organizations must be able to explain the changes made within their balance sheet period–over–period – and may do so through a roll-forward report. 
  • Practical Expedients: FASB allows certain practical expedients to facilitate transition accounting and general lease accounting.  
  • • You should select the practical expedients carefully after considering your current accounting policies and the broader impact of these practical expedients.  
    • You may need to choose some of these elections as a package, as described in ASC 842 Practical Expedients and Transition Requirements.  

  Challenge 4: Meeting ongoing auditing, risk management and tax accounting needs 

  Early coordination with auditing, risk management and tax functions of your company is another important element of planning that commonly presents challenges for companies while adopting ASC 842. 

  • Auditing – This standard is brand new – and there’s flexibility in the guidelines, which leaves some areas open to interpretation. Meet with your auditors early in the adoption process to help substantiate your decisions – which will only save you time when it comes for the time of the audit. This helps ensure that any questions about system controls are addressed prior to transition to ASC 842, including: 
  • • The overall control environment surrounding leases 
    • Automated versus manual controls 
    • System implementation requirements 
  • Risk Management – There are now higher stakes to having an accurate balance sheet with up-to-date lease information. Therefore, effective risk management includes a high level of interaction between lease accounting and administration to keep accurate lease financials and ensure payments are made on time. To do this properly, a selected lease accounting system should include the ability to identify and maintain leases. 
  • Tax Accounting – While tax accounting is often separate and distinct from financial accounting, recognition of deferred taxes may be a component of lease accounting. So, confer with your tax expert to make sure the general ledger and the lease accounting system properly consider deferred taxes. 

  Although there are various decisions ahead that require careful consideration for the lease accounting deadline, there are many resources available to help. Hundreds of public and private companies have already navigated the various requirements – and achieved success, which you can learn from.  

  By arming yourself with as much information as you can ahead of time, you too can be prepared to reach lease accounting compliance. Furthermore, a lease accounting system can provide you with an automated, easy transition to the new guidance – and result in significant savings for your business that you may have previously overlooked to help control, reduce or negotiate lease costs. 

    

   

  The post How to solve for the top ASC 842 lease accounting challenges first appeared on Visual Lease.]]> https://rebusinessonline.com/e-commerce-poised-to-anchor-future-of-industrial-real-estate/#new_tab Thu, 19 Nov 2020 18:15:19 +0000 https://visuallease.com/?p=3673 In the current economic environment, businesses are searching for new ways to save cash. However, they often overlook one critical aspect of their business: real estate management. Real estate leasing...
  The post Article: E-commerce poised to anchor future of industrial real estate first appeared on Visual Lease.]]> In the current economic environment, businesses are searching for new ways to save cash. However, they often overlook one critical aspect of their business: real estate management. Real estate leasing costs often represent one of their top three expenses, usually coming in right behind payroll. And most view their leasing costs as locked in, with little ability to impact them.
  The post Article: E-commerce poised to anchor future of industrial real estate first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesrealestatecouncil/2020/11/11/three-common-lease-management-errors-that-may-cost-more-than-you-realize/?sh=57508f8b40f0#new_tab Fri, 13 Nov 2020 18:54:10 +0000 https://visuallease.com/?p=3661 In the current economic environment, businesses are searching for new ways to save cash. However, they often overlook one critical aspect of their business: real estate management. Real estate leasing...
  The post Article: Three common lease management errors that may cost more than you realize first appeared on Visual Lease.]]> In the current economic environment, businesses are searching for new ways to save cash. However, they often overlook one critical aspect of their business: real estate management. Real estate leasing costs often represent one of their top three expenses, usually coming in right behind payroll. And most view their leasing costs as locked in, with little ability to impact them.
  The post Article: Three common lease management errors that may cost more than you realize first appeared on Visual Lease.]]> https://visuallease.com/lease-accounting-milestones-top-3-reasons-to-identify-internal-resources-early/ Fri, 13 Nov 2020 14:58:08 +0000 https://visuallease.com/?p=3658   Hundreds of private organizations have begun their journey towards lease accounting compliance. Although, many of them underestimate the amount of effort involved with preparation. In particular, assembling a team...
  The post Lease accounting milestones: Top 3 reasons to identify internal resources early first appeared on Visual Lease.]]>

   

  Hundreds of private organizations have begun their journey towards lease accounting compliance. Although, many of them underestimate the amount of effort involved with preparation. In particular, assembling a team of internal resources – and identifying their responsibilities – is one of the most important steps to a successful implementation.

  In this blog, we explore 3 critical ways your lease accounting and management team can help you achieve success – and why you should get started now.

  1) Lease inventory demands cross-departmental effort.

  Identifying all leases held by an organization is a complex and time-consuming task that the accounting team cannot do alone.

  To gather a full scope of all leases, accounting must engage with different areas of the business, including real estate and finance. You may also find it necessary to also include representatives from lease administration, C-level management, legal, procurement and IT.

  Real estate or facilities teams are an efficient way to identify a company’s property leases. If a business has multiple locations, this may involve tracking down records from many different sites.

  Additionally, departments such as procurement, IT and legal are essential to search through records for equipment leases and other contracts classified as leases under the new standards. For example, procurement might use a spreadsheet or other tool to track assets such as office machines, IT equipment or vehicle fleets.

  By involving the necessary personnel early in the lease identification process, companies can feel confident that their lease inventory is thorough and accurate.

  Learn more: How to Assemble Your Readiness Team

   

  2) Lease information affects a variety of business decisions.

  A company’s chosen lease accounting technology affects more than just the accounting team. Centralizing lease information into one system can transform efficiencies and financial savings beyond lease accounting compliance.

  Therefore, when evaluating a lease accounting system, you will want to have a clear understanding of who will need to access lease information. The chosen solution should make it easy for them to make updates, run reports and export any data they may need. Thus, it may be necessary to include those representatives during the evaluation of the solution.

  For instance, any employees responsible for ongoing tracking and management of leased assets — including making changes and adding any new leases — should be identified to verify the system is intuitive and easy to use, and therefore will help them keep lease data accurate and up to date.

  You may want to also include various departments, including IT, to evaluate how lease technology can support your organization beyond just accounting compliance, including accounts payable, accounts receivable and other data-driven decisions. IT is integral to this process, to ensure the solution can properly meet your requirements for integration with various third-party systems.

  Furthermore, involving executives, real estate/facilities staff, and others in the preparation process can make sure the chosen solution meets their needs beyond accounting and compliance requirements.

   

  3) Teamwork is essential to lease accounting compliance.

  It clearly takes more than the accounting team to transition to the new lease accounting standards and achieve compliance.

  By identifying the roles and responsibilities of internal stakeholders early in the process, the compliance team can create a plan of action that ensures accountability throughout lease accounting implementation.

  A team approach improves the efficiency, thoroughness and accuracy of data abstraction, which ultimately helps to ensure the company will meet compliance requirements on time and on budget.

  Together, the transition team can make informed decisions that will make long-term impacts on the company’s lease investments.

  Long-term benefits for lease accounting and for the business

  Once a company successfully transitions to the new lease accounting standards, the identified team can continue to use lease technology to share information and make decisions that impact both financial reporting and business performance — empowering the company to both maintain ongoing compliance and maximize the return on leased asset investments.

  To create a plan for assembling your stakeholder team and other steps of lease accounting  implementation and compliance, use the Lease Accounting Milestone Planner.

   

  The post Lease accounting milestones: Top 3 reasons to identify internal resources early first appeared on Visual Lease.]]> https://rejournals.com/qa-marc-betesh-visual-lease/#new_tab Thu, 05 Nov 2020 21:35:58 +0000 https://visuallease.com/?p=3640 As COVID-19 has wreaked havoc on the CRE industry, many tenants have been forced to make tough decisions when it comes to commercial real estate leases. Marc Betesh, founder and...
  The post Article: REjournals Q&A: Marc Betesh, Visual Lease first appeared on Visual Lease.]]> As COVID-19 has wreaked havoc on the CRE industry, many tenants have been forced to make tough decisions when it comes to commercial real estate leases. Marc Betesh, founder and CEO of Visual Lease, a lease optimization solution provider, shares insights on the future of office space.
  The post Article: REjournals Q&A: Marc Betesh, Visual Lease first appeared on Visual Lease.]]> https://www.cpapracticeadvisor.com/accounting-audit/news/21160278/fasb-proposes-three-lease-accounting-changes#new_tab Wed, 28 Oct 2020 14:07:27 +0000 https://visuallease.com/?p=3612 The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU) intended to improve three areas of the leases guidance.
  The post Article: FASB proposes three lease accounting changes first appeared on Visual Lease.]]> The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU) intended to improve three areas of the leases guidance.
  The post Article: FASB proposes three lease accounting changes first appeared on Visual Lease.]]> https://visuallease.com/everything-you-need-to-plan-for-lease-accounting-compliance-in-one-free-tool/ Thu, 01 Oct 2020 16:20:07 +0000 https://visuallease.com/?p=3486 Buying technology for cross-functional teams can be notoriously nightmarish, especially as you dive in and realize you need to expand your scope, shorten your timelines, or overhaul your processes along...
  The post Everything you need to plan for lease accounting compliance in one free tool first appeared on Visual Lease.]]>
  Buying technology for cross-functional teams can be notoriously nightmarish, especially as you dive in and realize you need to expand your scope, shorten your timelines, or overhaul your processes along the way. It can be overwhelming, especially in lease management.  

  Real estate lease documents are complicated, convoluted, and constantly changing, with big implications for the bottom line (not to mention looming FASB and GASB compliance deadlines) if the process isn’t managed correctly. And yet, for most businesses, the lease portfolio is both the second largest cost center behind payroll and the area of their finances they have the least visibility into and control over.  

  The right lease management software won’t just spit out compliance calculations – it will transform your business and the way your team works together, surface insights to help you stay on top of timelines and obligations and save you money by making sure you’re leveraging your leased assets as efficiently as possible.  

  It starts with complete and correct lease portfolio data, and a team aligned on processes, budgets, responsibilities, and goals. It’s easier said than done, but we’ve built a free tool to help companies on the path to compliance manage expectations, timelines, requirements, and teams.

  
  Introducing the Lease Accounting Milestone Planner 

  We’ve helped more than 700 companies take control of their lease portfolios and achieve compliance with IFRS, FASB and GASB lease accounting standards, and we’ve seen first-hand how complicated (and time-consuming) that process can be for companies.    

  In everything we build, we aim to embed and automate industry best practices so our clients don’t miss any potential savings – and don’t have to think twice about it. Whether you choose Visual Lease or another solution, we thought it important to embed these learnings within a planner to help you understand what it takes to hit these deadlines – or even better, get ahead of the curve.   

  So, we tagged our lease management and accounting experts internally and teamed up with the lease accounting experts at RSM and Grant Thornton to create a convenient tool to help you plan for these important deadlines and map out your plan for success.   

  The Lease Accounting Milestone Planner is the industry’s most comprehensive tool to help companies plan for FASB and GASB lease accounting standard compliance. 

  Simply enter the compliance standard you need to comply with and the target date you’re aiming to finish by and we’ll lay out a timeline for you and your team complete with milestones you can easily add to your calendar and resources to help you nail every step in the process. 

  Get your Personalized Compliance Plan

  The post Everything you need to plan for lease accounting compliance in one free tool first appeared on Visual Lease.]]> https://www.financialexecutives.org/FEI-Daily/September-2020/FASB-Delays-Move-to-ASC-842-How-One-Global-Manufa.aspx#new_tab Wed, 30 Sep 2020 14:09:55 +0000 https://visuallease.com/?p=3465 Following the FASB’s recent decision to extend the deadline for its ASC 842 standard for a second time, privately held companies have an additional 12 months to prepare to comply...
  The post Article: FASB delays move to ASC 842: How one global manufacturer made the most of the extra time first appeared on Visual Lease.]]> Following the FASB’s recent decision to extend the deadline for its ASC 842 standard for a second time, privately held companies have an additional 12 months to prepare to comply with sweeping new rules.
  The post Article: FASB delays move to ASC 842: How one global manufacturer made the most of the extra time first appeared on Visual Lease.]]> https://www.forbes.com/sites/forbesrealestatecouncil/2020/09/21/the-great-rent-strike-of-2020-shaping-the-future-of-commercial-lease-agreements/#4f0f0fe8afa5#new_tab Mon, 21 Sep 2020 11:40:34 +0000 https://visuallease.com/?p=3451 Since the start of the Covid-19 outbreak, commercial tenants have fallen behind on rent payments as cities across the U.S. have been on full or partial lockdown for months on...
  The post Article: The great rent strike of 2020: Shaping the future of commercial lease agreements first appeared on Visual Lease.]]> Since the start of the Covid-19 outbreak, commercial tenants have fallen behind on rent payments as cities across the U.S. have been on full or partial lockdown for months on end.
  The post Article: The great rent strike of 2020: Shaping the future of commercial lease agreements first appeared on Visual Lease.]]> https://visuallease.com/how-to-save-money-and-improve-roi-with-lease-accounting-technology/ Fri, 18 Sep 2020 13:00:32 +0000 https://visuallease.com/?p=3444 How to Save Money and Improve ROI with Lease Accounting Technology Leases are complex documents that can be challenging to interpret. Critically important details are often buried deep within a...
  The post How to save money and improve ROI with lease accounting technology first appeared on Visual Lease.]]>

  How to Save Money and Improve ROI with Lease Accounting Technology

  Leases are complex documents that can be challenging to interpret. Critically important details are often buried deep within a lease and can be (literally) hard to find. — Multiply that by hundreds of leases that companies often have, keeping up with all the different lease provisions is even more demanding.

  Yet, understanding lease obligations and options is a fundamental requirement of doing business and managing costs. A lack of insight into important lease details can put organizations at risk of unnecessary expenses — or of not meeting compliance requirements.

  With the new lease accounting standards, the penalty for not accurately reporting your lease obligations is now much higher and can include steep fines. These high stakes are what make a lease accounting and administration solution such a powerful tool — one that provides valuable insights that can help your business avoid unnecessary lease costs and maximize the return on your lease investments.

  Let’s take a closer look at how a lease accounting solution can help you identify cost savings and improve your ROI.

  1. Improved Visibility into Lease Obligations

  For public companies, lease obligations have implications for the balance sheet and compliance. For private companies, these obligations also have an impact on compliance, as well implications for bank covenants and for stakeholders who are concerned with assessing business risks.

  A lease accounting system should provide tools for not only automating vital accounting and disclosure reporting functions, but also ongoing tracking of all the leases in your portfolio.

  Technology should make leases more clearly defined and understandable — providing fixed fields of data that improve visibility into key aspects of leases such as:

  • Financials, including calculations and reports
  • Critical dates — and the consequences of missing those dates
  • Termination rights, like early termination, lease bailout (“sales kickout”), co-tenancy, exclusive use and sublet clauses

  This high level of transparency regarding lease obligations helps you mitigate risks and stay on top of important lease details that need your attention.

  For example, the system should alert you about an automatic renewal on a property lease you negotiated long ago — giving you the opportunity to determine whether the terms are still favorable or if they need to be renegotiated.

  Similarly, with visibility into equipment lease auto-renewals, you can compare the lease cost with the current market value of the asset to determine whether it makes more sense to purchase than to continue leasing the equipment. 

  Some systems can also alert you to events that you have to act on by a certain deadline, such as lease buyout opportunities.

  2. Additional Savings in Auditing Costs

  By improving lease transparency and automating the tracking and accounting process, lease accounting technology helps improve the accuracy and thoroughness of reporting. In turn, this reduces the amount of back and forth with auditors, which reduces costs overall. (For example, one customer saved tens of thousands of dollars in auditor fees by using Visual Lease’s lease accounting system.)

  Lease accounting software also should provide an audit trail, including a detailed log in which every lease change can be viewed. This helps to assure auditors that all lease information is up to date and accurate.

  3. Analyses That Help Lease Negotiations

  The reporting and analysis capabilities within lease accounting and administration systems should enable you to identify and capture information that is valuable to your business — information that can help you make decisions for the future.

  For example, in light of COVID-19, many businesses are now reevaluating boilerplate language within leases and abstracting clauses related to lease terms such as force majeure, business interruption insurance and termination options.

  A lease accounting and administration solution should enable you to search your leases for particular clauses that have been favorable to you — or, on the other hand, clauses that have not been beneficial — and use that knowledge when negotiating a new lease or a renewal.

  For instance, you might uncover that your monthly rent includes duplicate costs for services you were not aware of and are also paying for separately, such as cleaning, repairs or trash removal.

  Armed with this information, you may be able to renegotiate to have those costs removed from your lease agreement — or, you can cancel the services you have been paying for separately and take advantage of the services that the landlord provides.

  4. Automated Lease Accounting ROI

  For anything other than a small lease portfolio, manual accounting simply does not provide the tracking and analysis capabilities that a business needs to effectively manage leases on an ongoing basis. The alternative of outsourcing the task to an accounting firm can rack up thousands of billable hours in fees — a costly proposition for even a large company.

  Automating the lease accounting process brings a new level of efficiency into your business while helping you use your leased assets more effectively, for a greater return on those investments. The bigger your lease portfolio, the greater your opportunity for savings.

  How much can you save? Find out by using our simple ROI Calculator.

  Just plug in some numbers — including both real estate leases and equipment leases — for how many leases you have and your average annual spending per lease. 

  The ROI Calculator will not only show you the savings to be gained by automating your lease tracking and reporting functions, but also demonstrate the value that a lease accounting and administration solution delivers to your business.

  The post How to save money and improve ROI with lease accounting technology first appeared on Visual Lease.]]>