12 May As a non-public company, should I move forward our implementation of the new Lease Accounting Standard?
The Financial Accounting Standards Board (FASB) plans to propose that the deadline for private and not-for-profit organizations to implement ASC 842 be extended by an additional year as a result of COVID-19.
At first, this may appear to be good news and a lifeline for many companies however, NOW is the perfect time to go full steam ahead to get this done!
- There is a lot to get done, including validating the completeness and accuracy of the data. This effort will not change and every company has unknown issues to overcome that will cause time delays, cost overruns, and unwanted stress, potentially just when you don’t need it.
- Public companies have already adopted the standard (effective for most in January 2019) so it is extremely unlikely that non-public companies will receive a full pass.
- Now is a great time to save money on the implementation. Resources are more likely to be available and flexible, giving you more time to implement at the pace you want.
- Implementing when everyone else does could result in an inability to fully maximize the value from this transition.
- This additional time allows you to smooth out the workload and work to your timeline. This allows a longer implementation timeline taking into account those busy times in your team’s schedules, just like your year-end audit or other planned events.
- With new internal processes and potential software implementation needs, having this additional time allows for transitional issues to be identified and overcome, with less stress and minimizing cost.
- By pushing through the implementation, you could also be able to present your financials in an updated format for current shareholders or prospective buyers. One less question to answer during an already stressful due diligence process.
- Finally, next year will bring a new budget with pressure to keep costs down. Doing this now will most likely bring cheaper and more flexible resources to the table and it is already an approved project for the year.
To conclude, implementation of ASC 842 can be completed seamlessly in a remote environment – with the right resources, of course! The CFO Suite has those resources now. Contact us to discuss how we can be your partner through a successful implementation with the flexible timeline you need at the cost you deserve.
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