Lease Accounting Software is a new category of financial applications developed specifically to automate the record-to-report processes for the new ASC 842, GASB 87, SFFAS 54, and IFRS 16 standards. These applications take information about a lease contract such as rent formulas, payment frequencies, and discount rates and perform the necessary calculations to generate all of the journal entries needed for the balance sheet, income statement, cash flow statement, and quantitative disclosure reports.
What is Lease Accounting Software?
Key Features of Lease Accounting Software
- Lease Accounting Engine – Performs the calculations to generate the journal entries based upon lease contract variables, portfolio changes, and accounting policy elections
- Leasing Sub Ledger – Houses all of the debits and credits for depreciation, amortization, interest expense, and other categories in a central repository
- Policy Administration – Stores configuration data such as the chart of accounts and general ledger codes as well as policy elections for practical expedients, classification thresholds, and depreciation methods
- Close Automation – Reduces the time and effort required to perform reconciliation and cutoff at month-end with automated workflows and reporting
- Disclosure Generation – Performs the maturity and quantitative analysis to generate disclosure reports such as weighted average remaining lease term and weighted average discount rate
- Lease Administration – Tracks changes to the lease portfolio across various departments to identify new leases, contract and rent changes, and end of term decisions that impact accounting