Equipment Lease Service – Comply with new FASB norms
Today, businesses lease their equipment be it Office, Transportation, Agricultural or Construction Equipment either as a Tax Lease or as a Capital Lease depending on their specific situation.
The average Fortune 500 company leases between 1,000 and 10,000 pieces of equipment representing between $100M and $1B of leasing obligations. Over 1 Billion of Equipment is Leased or Financed Each Year in the United States alone.
The Challenges with Equipment Leasing
The leased assets are the Most Poorly Managed Assets in a Company’s Financial Portfolio. Despite the large size and value, most organizations don’t have processes and controls that support their leasing program. There is no single division or group owns leasing within the Organization. There is no one software application that stores all the leasing data. As a result, most CFOs don’t know what the equipment is, where is it located and when the leases expire.
While spreadsheets are fine to track, they are not scalable and reliable for tracking thousands of assets in several locations. Due to this companies don’t realize the savings they expected from their leasing programs. Also, they cannot return equipment on-time resulting in extra fees around the end of the lease period.
The biggest accounting change ever made
Some of Americas’ best-known companies will soon have to effectively boost the debt they report on their balance sheets by tens of billion dollars… Wall Street Journal.
Though equipment lease accounting is relatively simple task compared with Real Estate Leases due to fewer data points and straightforward terms the challenge arises due to volume and the diversity of the assets. It is also unpredictable because of master leases with subleases with different terms and expiration dates, which is yet another challenge.
The Financial Accounting Standards Board and International Accounting Standards Board have announced new lease accounting rules which will require companies to provide much more detail about leases in their quarterly and annual filings.
Leases will no more be in the footnotes of financial reports but will move to being line items on the balance sheet. Meeting these new lease accounting guidelines will require CFOs to implement more stringent processes and controls than exist today. And lease accounting is no more a spreadsheet exercise.
Sybrant has been in the forefront offering Lease Administration services including Lease Abstraction services to Equipment Lease and Real Estate / Property Management companies in the US and across the globe. We have been solving the problems faced by the CFOs by getting all the data into a single coherent and flexible system by abstracting the leases and maintaining it continually. To this effect we have partnered with Visual Lease one of the successful software products that is used by major equipment leasing firms and corporate in the USA. Our team of professionals understand the specific equipment industry along with lease administration, legal, and accounting knowledge.
The advantage we bring to the table are:
- Accurate accounting and reporting for improved statutory compliance (FASB and IASB) and decision making
- Reduced end of term fees for better profitability
- Tracking all the equipment throughout the lease tenure and beyond
- Obtain competitive financing rates for the new items to be leased
- Flexible engagement with on-time delivery and 100% quality on Dates & Dollars
Sybrant’s all-round Lease experts will be able to abstract any volume of lease documents you have. We can customize the software application / database to your requirement, integrate with ERP / accounting software and migrate the data from your legacy system / excel database and verify the accuracy of the information.
- We help you to easily calculate your Lease and Expenses obligation
- Track, manage and enhance visibility at every stage of leased assets lifecycle