How Accounting Software Can Help You With Accounting Standards

In general, the available software will help accountants and anyone in finance when it comes to recording financial records and then making changes to them. This is in preference to keeping paper records that are difficult to adjust without re-writing. They can become very messy unless numbers add up straight away.

EZLease for ASC 842 compliance is an asset in terms of software for anyone accounting for leases as part of their job. So, we shall look to explore this package further.

EZLease

EZLease will allow a company to simplify its lease accounting. This is because it will allow for fast compliance with ASC 842, one of the accounting standards. This is something that a company must comply with. So, any piece of software that helps with this is going to be of great benefit.

What Types of Leases Will EZLease Simplify?

When it is a case of wanting to simplify lease accounting it is good to know that it is possible for different types of leases. For example, the software EZLease will simplify lease accounting that relates to vehicles, equipment, and real estate. Using the software makes processing financial transactions relating to leases easier for a company’s finance department when it comes to compliance. 

Accounting software better records and understands standards. EZLease is one such piece of software and so one to check out.

Accounting Standards

An accounting standard is defined as a general set of principles, procedures, and standards that will form the basis of all financial accounting practices and policies. Leases will then come with their own sets of standards. An accounting standard that relates to leasing practice, as mentioned above, is ASC 842. To say something briefly about it here, the ASC stands for Accounting Standard Codification. Its topic is then 842. It is the new leasing standard that has replaced the  GAAP ASC 840. This was an accounting standard for nearly 40 years, so I guess it was time for a change.

Anyway, when any accounting standard is new it is hard for existing finance staff used to the old accounting standard to get to grips with it. This is where accounting software can help with understanding and the way leases are now recorded for ongoing compliance.

Who Must Comply With ASC 842?

Those companies that lease assets will be required to comply with ASC 842. They are referred to as lessees when it comes to identifying their assets or liabilities on a balance sheet in terms of rights and obligations. It is applicable where terms are greater than one year. It is ACS 842 that will impact new processes. Extra training will be required but thankfully less so when software is used to make the process easier, better guided, and more understandable in terms of recording and compliance. 

Public companies have already implemented ASC 842 but now private companies also have to comply. This will be as soon as December 15, 2021. So, there is every need to get on board with EZLease sooner rather than later, if you are in this position.

What is the Difference Between IFRS 16 and ASC 842?

The difference here is with regards to the differentiation of finance and operating issues for lessees that are still required under US GAAP. So, there is this transition that needs to be considered. It is never easy moving from an old standard to a new one. The software helps with this but some understanding of accounting practices and changes will be necessary to comply and account correctly for leasing transactions in the future.

In summary, there is value to using accounting software to deal with leases as it can deal with, for example, the new accounting standard ASC 842. It is for employers to make sure that their staff is equipped with the best software to do the task at hand. This will prove efficient and save a good deal of time. So, with this in mind, we should look towards obtaining EZLease as our accounting assistant.