You think your company’s doing just fine. At least, you’re pretty sure.
But the Financial Accounting Standards Board just changed their compliance standards, though, so you can’t be entirely sure.
Fortunately, there are a few relatively painless ways to work towards complete FASB compliance. In this article, we’ll break down three of them for you. This will help you get a head start on the new reporting standards and keep your company in the clear.
1. Accounting for Your Assets
It might seem obvious, but one of the best things you can do to help your company achieve FASB compliance is to account for your assets.
Here’s the trick: you may not have accounted for your assets as well as you thought.
According to new guidelines on lease accounting, all leases over 12 months must be accounted for in your balance sheet as assets and liabilities, not just financial leases.
In addition, you have to recognize a right-of-use asset as well as a lease obligation. This means that depreciation on leases will have to be counted separately from interest on lease liabilities.
2. Update Your Lease Inventories
While you’re taking a closer look at your leases, you should also take a closer look at how you’re tracking lease information.
Many companies rely on several disparate systems to track and monitor leasing agreements. It seems like a good idea…until information gets lost in the cracks between file types, hard drives, filing cabinets, and business units.
Getting a handle on all of that information, wherever it may be located, will give you a major headstart to keep up with compliance. If you can, do your business a favor and consolidate your information onto one software like an integrated workplace management system.
3. Transparency, Transparency, Transparency
Finally, when you’re looking for ways to achieve FASB compliance, transparency on all fronts is key.
First, you should have transparency with your stakeholders, the board of directors, lenders, investors, and even your C-suite. Putting your leases on your balance sheet as assets and liabilities will change the numbers on your balance sheet, and you have to be prepared for that.
This can be especially important if you’re looking to bring on new investors while this transition happens. The sooner investors have the full picture, the sooner they’ll be able to make an informed decision.
Second, you should strive to be as transparent with FASB as you make changes. Transparency is a good sign that you have nothing to hide.
IBM TRIRIGA for FASB Compliance
Still struggling to figure out the ins and outs of FASB compliance?
Good news: IBM TRIRIGA can make FASB compliance a whole lot easier.
TRIRIGA is a comprehensive software that helps you make sense of your facilities and assets, whether you’re a small business or a Fortune 500 with leases all over the world.
Because when it comes to the FASB, you don’t have time to get caught in the little details. You’ve got a business to run. You want to make sure you get it right the first time.