How Quarem Helps with ASC 842 and IFRS 16 Compliance

 October 27, 2020

By  Guy Gray

The best indicator of true expertise? It’s often when something complicated is brought back down to earth. ASC 842/IFRS 16 compliance is complicated, to say the least. You need a resource that not only makes it simple, but also puts valuable information at your disposal.

Quarem has all of the staples you need to get compliant and maintain the standards. Let’s do a brief flyover of both of these complicated standards and then show you how Quarem can help.

ASC 842 Compliance

According to the FASB Accounting Standards Codification, the FASB released ASC 842 and other account standard updates “to increase transparency and comparability among

organizations by recognizing lease assets and lease liabilities on the balance sheet

and disclosing key information about leasing transactions.”

Basically, the core concept behind ASC 842 is to better recognize lease assets and liabilities. Total accounting transparency is the goal and it’s important for organizations to have a complete understanding of their leasing costs and how they are funded.

IFRS 16 Compliance

According to the International Financial Reporting Standards Foundation, “the objective of IFRS 16 is to report information that (a) faithfully represents lease transactions and (b) provides a basis for users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. To meet that objective, a lessee should recognise assets and liabilities arising from a lease.”

IFRS compliance goes hand in hand with FASB compliance. With these standards, you need to be aware of things like whether an agreement is a lease or not, how the lease is classified (operating or finance) and whether you are the lessor or the lessee. Similar to ASC 842, IFRS 16 standards have the goal of recognizing assets and liabilities.

How Quarem Helps

With Quarem, you no longer have to spend long hours ensuring your leases are up to the standards outlined in ASC 842 and IFRS 16. The software does all of the complicated calculations for you and captures all of the important key details such as:

●  Option declaration and payments

●  Index rates for variable payments

●  Treatment of MTM payments

●  Lease vs. non-lease payments

●  Initial/fixed/variable payments

●  Compounding frequency & 360/365 convention

●  Lease terms and IBR/discount rates

●  Lease modifications and re-measurements

Additionally, Quarem gives you detailed reporting that comes with the industry’s most granular and sophisticated user access controls for ASC 842 and IFRS 16 compliance. Easily capture and report on all the metrics you need that are associated with these new standards.

If you want to make sure your operation is fully compliant, then it’s time to get organized. Let Quarem help! Request a demo today.

Quarem has all of the staples you need to get compliant and maintain the standards. Let’s do a brief flyover of both of these complicated standards and then show you how Quarem can help.

ASC 842 Compliance

According to the FASB Accounting Standards Codification, the FASB released ASC 842 and other account standard updates “to increase transparency and comparability among

organizations by recognizing lease assets and lease liabilities on the balance sheet

and disclosing key information about leasing transactions.”

Basically, the core concept behind ASC 842 is to better recognize lease assets and liabilities. Total accounting transparency is the goal and it’s important for organizations to have a complete understanding of their leasing costs and how they are funded.

IFRS 16 Compliance

According to the International Financial Reporting Standards Foundation, “the objective of IFRS 16 is to report information that (a) faithfully represents lease transactions and (b) provides a basis for users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. To meet that objective, a lessee should recognise assets and liabilities arising from a lease.”

IFRS compliance goes hand in hand with FASB compliance. With these standards, you need to be aware of things like whether an agreement is a lease or not, how the lease is classified (operating or finance) and whether you are the lessor or the lessee. Similar to ASC 842, IFRS 16 standards have the goal of recognizing assets and liabilities.

How Quarem Helps

With Quarem, you no longer have to spend long hours ensuring your leases are up to the standards outlined in ASC 842 and IFRS 16. The software does all of the complicated calculations for you and captures all of the important key details such as:

●  Option declaration and payments

●  Index rates for variable payments

●  Treatment of MTM payments

●  Lease vs. non-lease payments

●  Initial/fixed/variable payments

●  Compounding frequency & 360/365 convention

●  Lease terms and IBR/discount rates

●  Lease modifications and re-measurements

Additionally, Quarem gives you detailed reporting that comes with the industry’s most granular and sophisticated user access controls for ASC 842 and IFRS 16 compliance. Easily capture and report on all the metrics you need that are associated with these new standards.

If you want to make sure your operation is fully compliant, then it’s time to get organized. Let Quarem help! Request a demo today.

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About the author 

Guy Gray

Guy Gray serves as Chief Operating Officer overseeing our technology and client services teams. He is responsible for guiding Quarem application development, networking and security, as well as new client implementations.

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