The Financial Accounting Standards Board (FASB) adopted ASC 842 to give investors and lenders more visibility into companies’ holdings. A company with numerous lease liabilities on its financial statements may have trouble accessing credit and searching for investors or buyers. “A lease is really no different than debt, and it’s often just as hard to exit a lease as it is to get out of a loan,” RSM Senior Manager Veronica Bulman said. The result for those who run their business by leasing equipment and buildings is their need to identify and review each and every lease – no matter the financial size or length of time.
For some companies, this will result in the searching of 1000s of documents that may be – but mostly are not – in one central location. This is especially a concern for firms that have grown through acquisition of smaller rivals and the need to find that needle in the sea of documents in technologies they may know little about.
This is where Topla Intensify, by InfoDNA®, can help. It will connect to any combination of repositories and interrogate, compare and extract the needed documents (leases). Topla Intensify™ can also help migrate all of the content from many different repositories to one repository. These documents can then be examined with Topla to determine if a lease meets the requirements for reporting on their balance sheet. The result will be a single source of the truth and streamline the efforts to allow a better future state for these and other important business documents.
“Imagine I was trying to acquire a pharmacy chain,” RSM partner Troy Merkel said. “Thanks to ASC 842, I can see that, nationwide, one chain has 1,000 one-year leases, and the other has 1,000 five-year leases. I would probably be more likely to buy the first, as it’s more nimble and ready to take on the challenges facing brick-and-mortar retail.”
It is a business imperative that is rooted in better technology. Let us help you assess your requirements.