Even those who planned for the implementation of the new lease standard found it challenging, time consuming, and resource driven.
Here is a brief outline of key implementation planning steps to assist you throughout the process:
- Give yourself time to have a solid understanding of how ASC 842 defines a lease.
- Remember that any term-based easement/contract term could meet the definition of a lease.
- Look at your service contracts to see if they contain an embedded lease.
- Evaluate any existing debt covenants you may have.
- AND FINALLY, evaluate system requirements.
To alleviate the stress of a rapidly approaching financial reporting deadline, you’ll want to plan beforehand, or reach out to us.
BUSINESS CHALLENGE: Financial Reporting Fire Drill Over Holidays
Our client—a large international utility company, acting to accelerate the transition to a carbon-neutral world for a positive impact on people and planet – made an urgent call to us two days before Christmas. They were facing a fast-approaching financial reporting deadline over the Christmas holidays that required unique technical accounting expertise. This had become a challenge for senior management and time was of the essence. They had $700M worth of lease liability that needed to be accurately reported by January 3rd, in time for their earnings release on Jan 6th.
Focused on Sirius Solutions’ value-based consulting approach and over two decades of expertise in technical accounting for large corporations, the client elected Sirius Solutions to deliver their reporting and beat the clock.
Our Sirius Solutions’ Financial Operations Practice assembled a team of experts that was up and running within an hour. Our experts understood the unique implications of newly constructed assets on wind farms and their attributes. Plus, they knew the business and understood the stage of construction of the assets and the point in time in which the debt becomes triggered onto the balance sheet. Our innovative proprietary approach, combined with our specialized industry expertise, enabled us to develop a process in which we achieved swift and precise actionable data.
By quickly establishing a framework to analyze the client data and information, we were able to deliver the reporting required and remediate the issue quickly and ahead of schedule.
IMPACTFUL RESULTS: $700M in liability reported in 11 days
WORKING WITH SIRIUS SOLUTIONS
Sirius Solutions provides individualized solutions that effectively meet your demands as you transition to the new standard using a scalable methodology that reduces implementation time.
Working with Sirius Solutions means working with experienced Lease Accounting leaders and has numerous advantages. We have demonstrated success in assisting businesses with their ASC 842 implementation, and our team can assist with all aspects of the implementation process.
Our detailed approach reduces risks and potential challenges, beginning with conducting preliminary impact assessments, analyzing and categorizing existing leases, establishing policies and procedures for ongoing lease activity, addressing technology and infrastructure requirements, and project management.
For organizations with smaller lease contract portfolios, we will deploy a pre-defined, accounting-focused model that will meet your short-term reporting requirements while also laying the groundwork for long-term lease accounting and reporting.
Sirius Solutions also offers full ASC 842 outsourcing. We can handle all aspects of your lease accounting, such as document storage, balance sheet and income statement activity, and required disclosures. We also help with the year-end audit process, collaborating with your outside auditors to provide ASC 842-related assistance.