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Lease Accounting Software FAQs

What is lease accounting software?

Lease accounting software is designed to help organizations manage lease financials, automate calculations, and comply with accounting standards such as ASC 842 and IFRS 16. It centralizes lease data, tracks liabilities and assets, and generates accurate financial reports to support audits and compliance.

What are the features of lease accounting software?

Comprehensive ongoing support

The vendor's support staff should be able to provide you with ongoing product training, technical support and full customer support. Accruent global support team offers free superclass training, a proven certification training curriculum and a robust user network.

The right automations and functionalities for your business

The lease accounting tool you choose should meet your needs both out of the box and in the long term. Ask your potential vendors:

• If reports will be formatted according to the standard's disclosure requirements
• If their software will send automatic alerts when it's time to renew
• If the software can guarantee compliance as financial reporting requirements change
• If the cost of lease accounting software includes updates and enhancements

Customizable integrations

After the initial sale, many vendors do not offer product enhancements and innovations, so their products quickly become dated. Look for a company that continuously enhances its offerings based on feedback and market trends. In the same vein, make sure that the solution you choose is not siloed and that it will offer the continued functionality and integrations you will need down the line.

SOC report compliance

System and Organization Controls (SOC) reports are reports issued by third-party CPAs that help establish credibility of service providers. They establish credibility based on five categories: security, availability, processing integrity, confidentiality and privacy.

There are three types of SOC reports, though SOC type 1 and SOC type 2 are most relevant for lease accounting software.

You will want to make sure that your provider is compliant with SOC 1 and SOC 2 so you can be sure you're working with trustworthy software.

Is lease accounting difficult?

Lease accounting doesn’t have to be difficult — as long as you are using configurable lease accounting software. Full-service lease accounting solutions that are flexible enough to work and scale in your specific sector ― retail, corporate, healthcare, telecom, public sector, professional services, construction companies, and more ― make it easy to monitor your full lease portfolio, perform financial calculations, recognize assets and liabilities on balance sheets, and meet compliance regulations.   

What is the best lease accounting software?

The best lease accounting software is one that will help you effectively identify, manage and reduce any financial risks associated with your lease portfolios by:

• Automating your processes
• Helping you keep track of journal entries for simpler lease liability
• Helping you track audit trails for the financial accounting standards board and other regulatory bodies

You will also want a tool that:

• Integrates easily with your existing tools and systems, including your ERP, your existing POS, and your accounting systems
• Is verified as a compliant solution for handling regulations - like ASC 842, IFRS 16 and GASB 87 - complete with reporting and ERP integration
• Does not carry the risk of a failed implementation, which can cost time and money
• Guarantees accurate lease abstraction
• Offers ongoing product support and innovation, including ongoing training for employees
• Will not be siloed

What is the new accounting standard for leases?

The new accounting standard for leases is ASC 842 in the United States, which mandates the inclusion of most lease arrangements on the balance sheet. This means recognizing a lease liability and a right-of-use asset, aiming to provide a more accurate financial representation. Fortunately, Accruent LX Contracts is a lease management software solution designed to assist organizations in complying with ASC 842 as well as other international lease accounting standards.

What is ASC 842?

ASC 842 is a lease accounting standard issued by the Financial Accounting Standards Board (FASB) that requires organizations to record most leases on the balance sheet. It introduces right-of-use (ROU) assets and lease liabilities to improve transparency into financial obligations. ASC 842 applies to companies reporting under U.S. GAAP and requires accurate tracking, reporting, and ongoing compliance management—often supported by lease accounting software like Accruent.

What is IFRS 16?

IFRS 16 is an international lease accounting standard issued by the International Accounting Standards Board (IASB) that requires organizations to recognize nearly all leases on the balance sheet. It replaces previous standards by eliminating the distinction between operating and finance leases for lessees, increasing financial visibility and consistency. IFRS 16 compliance requires centralized lease data, real-time reporting, and audit-ready documentation—capabilities supported by Accruent’s lease accounting solutions.

What is the difference between ASC 842 and 840 lease accounting?

The key difference between ASC 842 and ASC 840 lease accounting lies in how leases are reported on financial statements. Under ASC 840, many operating leases were kept off the balance sheet, leading to potential inaccuracies and reduced transparency in financial reporting. In contrast, ASC 842 requires most leases, including operating leases, to be recognized on the balance sheet. This means lessees must record both a lease liability and a corresponding right-of-use asset, providing a more accurate representation of a company's financial position. The transition to ASC 842 aims to enhance transparency, aligning lease accounting practices with a focus on economic reality and improving the consistency and comparability of financial statements.

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