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FASB Lease Accounting Software

Lease accounting software can certainly make your life easier when it comes to lease management, but did you know that it also helps businesses stay in compliance with FASB lease accounting standards?

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  • iLeasePro Lease Management Solution

    When it comes to lease accounting software, some of the terminology pertaining to different standards can seem like a word salad that’s loaded with too many acronyms. It’s easy to get dizzy if you’re new to dealing with acronyms like GAAP, FASB, IASB, ASC 840, ASC 842, and so on.

    So let’s do some clarification. What follows is a breakdown of FASB lease accounting software—what it is, how it works, and what you need to do and have in your software to make sure you stay in compliance with all the different standards that regulate leasing.

    What is FASB Lease Accounting Software?

    This kind of lease accounting software is designed to help companies stay in compliance with standards specified by the Financial Accounting Standards Board, which applies to both public and private companies in the US, along with nonprofits.

FASB Lease Accounting vs Other Accounting Standards

  • It’s important to differentiate the FASB lease accounting from the other standards that apply to leases with different origination.Specifically:

    • GASB. GASB stands for Government Accounting Standards Board, and it applies to any leases that include government contracts.

    • IASB. IASB stands for International Accounting Standards Board and it applies to US companies that are doing business abroad or internationally located companies.

FASB Lease Accounting Software and ASC 842

One of the most critical functions of any lease accounting software packages is to stay in compliance with ASC 842.

This standard replaced ASC 840 in December of 2021, and it changed some of the terminology pertaining to leases in a way that affects a company’s balance sheet.

It’s important for FASB leases accounting software to remain compliant with ASC 842 win both calculations and leasing terminology.

How ASC 842 Software Works for Lease Management

ASC Lease Modifications. ASC 842 distinguishes between two different types of modifications. The first modification is any change that gives the lessee additional rights that weren’t covered in the original lease. This includes changes in the term of the lease, or a change that only pertains to a single consideration in the original contract.

The second is any change that terminates a lease either partially or fully by reducing the rights of the lessee to use one of more of the underlying assets specified in the original lease.

Evaluating ASC 842 Lease Modifications

There are two questions to ask when you’re evaluating any modifications in your leases to stay in compliance with ASC 842:

  • Does the modified contract still contain the basic tenets of the original lease?
  • If it does, should that contract be considered a new lease or just a significant change to the original lease?

These questions are important because a modification can change the scope or the terms of the original lease so much that it effectively creates a new lease.

It’s important to have lease accounting software that can make this differentiation so that your leases don’t accidentally end up out of compliance.

What Conditions Create a New Lease Under ASC 842?

Two conditions are necessary for this to happen.

  1. The first is that a modification grants the lessee an additional right-of-use (ROU) access that wasn’t in the original lease (e.g., additional floor space in a leased building).
  2. The second is that the lease payments for that additional right-of-use remain consistent with the standalone price for that add-on, including any unique conditions that become part of the contract as a result.

If both of those conditions are met, the lease modification effectively creates two separate contracts. If they aren’t, the modified lease isn’t a separate entity.

In addition, if the modification doesn’t create a separate contract, the lessee needs to reassess several important factors.

These include the classification of the lease, the term and purchase options, the discount rate, and the allocation of any lease considerations that may be changed by the modification.

Lease Accounting Software and IFRS

The International Financial Reporting Standards (IFRS) provide accounting rules and guidelines to help make company financial statements more transparent and easier to understand.

They’re designed for public companies, and IFRS currently has provides for over 150 jurisdictions, including those in the European Union. The United States uses a different system, the GAAP.

IFRS 16 specifies how leases will be recognized, measured, recognized and presented, and it outlines what will be disclosed. It requires lessees to recognize assets and liabilities for all leases that extend for over 12 months where the underlying asset has significant value.

How Lease Accounting Software Helps with Estate Management

Wills are complicated, and so is estate management. In some wills and estate resolution scenarios, the assets are complex, and there are leases involved in property, cars and so on. Lease accounting software can help sort out these assets to give heirs, lawyers and anyone else with an interest in the estate a picture of what’s in the lease portfolio and how much it’s worth. This can provide financial clarity and eliminate confusion, and in many instances this kind of estate management from lease accounting software can be invaluable.

  • iLeasePro Lease Portfolio

    Get the Best Lease Accounting Solution from iLeasePro

    At iLeasePro, we understand every aspect of leasing, including FASB lease accounting. That means we know what lease features are involved, what security protections need to be included, and how they can best be applied to your business leasing situation.

    We also know the ASC 842 standard inside out, and as such we know how lease accounting software has to work to be in compliant with that standard.

    We’ve provided lease accounting software for small business, and for larger companies as well. Our lease accounting software pricing is among the best in the industry, and when you call us we can set you up with a lease accounting software free demo.

    To do this, call us at 888-351-4606, or you can email us at We also have plenty of great information about lease accounting software on our website, which is, and you can chat with a live representative there as well.

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