Datasheets

tangoanalytics.com 1 THE NEW LEASE ACCOUNTING STANDARDS: REDUCING THE RISK It's clear that the accounting and lease administration world is undergoing tremendous change as companies prepare to adopt the new lease accounting standards–Financial Accounting Standards Board (FASB) 842 and International Financial Reporting Standard (IFRS) 16. These new regulations impact all entities, but especially retail and restaurant companies who lease the majority of their stores. What's not clear is whether the existing lease accounting software solutions, which are responsible for capturing the necessary data and crunching the new calculations, are up to the task. This conundrum introduces a variable that CFOs and accountants do not like—risk:. · Risk that established platforms do not get it right. · Risk that all possible scenarios have not been thought through and coded correctly into software. · Risk that the transition will go wrong and companies will need to restate their financials. TANGO UNDERSTANDS THAT RISK, AND WE'VE DONE SOMETHING ABOUT IT. Our Lease Administration and Accounting software was built f rom the ground up to adhere to the new accounting standards, which means we do not need to rewire our solution like other software providers—substantially reducing risk. But we wanted to go further—to ask and answer the hard questions that all CFOs and accountants need to know. Does your lease accounting software meet all the new requirements needed to comply with FASB-842 and IFRS 16? It's not enough to just say you're compliant. Real compliance requires the opinion of a creditable third party—one that can provide an independent opinion. So, we did just that. Tango worked with BKD, one of the country's largest and most trusted CPA & advisory firms, to assess and validate that our calculations support the new standards. BKD tested real-life scenarios—46 to be exact—including leases containing: · Tenant inducements · Subtenants · Payments both in arrears and advance · Free rent periods · Adjustments for entry errors · Direct costs · Index-based increases and early terminations All scenarios were tested against FASB-840 (current standards) as well as the new FASB-842 standard and IFRS 16 Leases, the new international standards. In the end a third-party accounting firm validated that Tango's lease accounting engine meets the new FASB and IFRS standards. We did this to provide our customers and their auditors confidence that the calculations being performed within our lease accounting solution adhere to the new regulations. By doing so—we've dramatically reduced the risk associated with adopting the new way of accounting for leases. Do you have similar confidence in your current lease accounting solution? Contact us to learn how Tango can help.

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