Aptitude Software: Post-Enron Lease Accounting Rule Requires New Financial Control over Off-Balance-Sheet Liabilities

Aptitude innovates with an accounting solution for an accounting requirement

Aptitude Software announced today an innovative new solution enabling enterprises to gain control over the trillions of outstanding lease liabilities that are typically held off-balance-sheet.

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Lease accounting solutions for IFRS 16, ASC 842 from Aptitude Software (Photo: Business Wire)

The move supports Chief Financial Officers who need to deliver investors and management with clear information about lease liabilities moving onto balance sheets following new accounting rules from the Financial and International Accounting Standards Boards that take affect 1 January 2019 (ASC 842 and IFRS 16.)

The scale of the lease accounting challenge is very large. Many experts estimate that the new rule will push $2.86 trillion of liabilities onto balance sheets, with many enterprises having thousands of leases spread across global businesses.

Aptitude Software’s analysis has found that many companies’ potential lease liabilities are a significant portion of their existing balance sheets. According to the FT, “this potentially has big affects on companies’ credit scores and debt covenants based on ratios of obligations to cash, assets or profits” – driving CFO’s to take notice of the new rules and institute appropriate lease accounting controls.

There are other proposed solutions on the market from lease management vendors, but Aptitude Software brings a unique ability to serve finance as they implement complex accounting scenarios while ensuring CFO’s increase financial control, transparency and insight.

Now that there are only 18 months until the new rules need to be adopted, enterprise finance teams are realizing the complexity of accounting for leases.

“One of our large telecommunications customers has estimated a 66 fold increase in lease accounting journal lines,” says Ross E. Chapman, Aptitude’s Marketing Director. “The new rules challenge finance teams to integrate and automate lease accounting into financial workflows.”

Other enterprise teams are challenged with new accounting complexities such as lease classification tests, how to account for multiple subleases within a single headlease, managing embedded options, and accounting for leases with variable payments.

Join Aptitude Software for an upcoming lease accounting seminar

Join us on 11th July to discuss our accounting solution with our accounting experts and how it can help you.Please register at https://www.aptitudesoftware.com/events or via [e-mail].

About Aptitude Software

Aptitude Software delivers specialist enterprise finance applications to equip CFO’s to fulfil their strategies and ambitions. Our software controls and automates high volume, complex accounting processes to provide solutions that aren’t served well by legacy ERP and IT-centric approaches. For more information, visit www.aptitudesoftware.com or contact us at [e-mail].

Aptitude Software is a Microgen plc company (LSE: MCGN).

Copyright © Aptitude Software Inc. 2014-2017.

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Aptitude SoftwareRoss E. Chapman+44 207 496 8100orSarah Werner+1 617 273 [e-mail]