The Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) to improve financial reporting on leasing transactions. The new standard comes into effect on December 15, 2018 for public companies. The ASU impacts all companies that lease real estate assets, including leases for real property that are longer than 12 months.
The purpose of the ASU is to faithfully represent an organization’s leasing activity.
- The requirement puts forth new standards to accurately display the amount, timing and uncertainty of cash flow arising from lease activity to potential investors, lenders and other financial institutions.
- The ASU establishes a fair evaluation of stabilized rent and determination of cash flow for financial reporting.
- The end result is a financial reporting standard that is a globally accepted method to evaluate real property for investment, loans and purchase.
SS&C SKYLINE’s lease management and setup process has been designed to make compliance with current and future changes to GAAP accounting requirements, like the ASU, simple and intuitive. With SKYLINE’s comprehensive Straight-Line Rent (SLR) reporting, you can configure existing leases and set up new leases to meet monthly reporting requirements for investors and financial reporting. SKYLINE stabilizes rent by taking the variable charges of a lease and breaking it into equal amounts spread over the life of the lease. This makes it so charges can’t be manipulated to show higher or lower earnings based on when charges are taken.
SKYLINE’s streamlined SLR reporting updates historical, current and future lease calculations, and automatically calculates historical and current rent revenues and deferments. SKYLINE provides detailed
impact analysis including cap rate calculations, lease buildouts and projected deferments. In addition, SKYLINE makes it easy to create detailed property and portfolio views to evaluate lease deals and understand the impact of property accounting for current and future requirements.
Now is the best time to implement SLR reporting so you’re prepared before FASB’s new ASU standards come into effect. SS&C’s SKYLINE Property Management solution has all the advanced features you need to make SLR reporting and accounting simple. For additional information on SKYLINE, contact Mark Ziemba at email@example.com.
Real Estate & Property Management, Regulation