The “standard” translation process is not time- or cost-effective in meeting FASB’s new lease agreement accounting standards update ASC 842. Accountants and lawyers are beginning to realize how the translation of lease agreements will fit into their workflow towards compliance. They are going to need an efficient solution that minimizes impact on transition resources. There are also several issues the will need to take into consideration when developing their new lease agreement translation process. The process needs to minimize impact on tax preparation and auditing team schedules to avoid additional problems and costs.
Key differences between the processes
The standard translation process is governed by ISO 17100:2015 and includes the use of at least two professional translators for a robust and accurate translation. This is extremely costly and time-consuming if the purpose of the translation is to aid accountants to meet ASC 842 compliance – particularly if the volume is high. Key differences between the standard process and an efficiently streamlined process specific to lease agreement translations are listed below: Read more
As companies begin to assess what changes are needed to comply with FASB’s new lease accounting standard, ASC 842, it’s important to understand the role that technology can and should play in translating lease agreement contacts for abstracting purposes.
Without a specialized set of translation technologies, translating multiple leases to comply with ASC 842 can be extremely time- and cost-prohibitive.
Many companies have at least a few dozen, if not thousands of foreign lease agreement contacts. Now that FASB requires those leases to be reported on the balance sheet, getting them translated is a practical requirement.
Professional human translation is the right choice in most circumstances, but when there are so many documents that have very similar characteristics and that only need to be abstracted (as opposed to something requiring a higher quality of translation such as formally published marketing material), the standard human translation process can unnecessarily cost tens of thousands of dollars. That’s where a specialized set of translation technology tools can help: Read more
With its effective date of 2018 looming around the corner, an important issue of FASB’s most recent lease accounting standard (ASC 842) is the potential challenge that Lease Administrators, CFOs, and accountants will have with managing many more lease agreements.
Now that lease agreements outside the United States are required to be recognized on balance sheets, compliance will become more complicated. Globalization has resulted in an ever-increasing pressure on accountants, lease administrators, attorneys, and their firms to manage leases in a fast, reliable, and cost-effective way.
We have summarized several common points that the “Big 4” accounting firms believe should help address the new regulation. Read more
With its effective date of 2018, an important issue of the FASB’s most recent accounting standard (ASC 842) is the potential challenge that Lease Administrators, CFOs and accountants will have with translating lease agreements. Lease agreements for tangible assets outside the United States are now required to be recognized on balance sheets- making compliance more complicated. Globalization has resulted in an ever-increasing pressure on accountants, lease administrators, attorneys, and their firms to deal with fast, accurate, and cost-effective translations of leases. Service professionals should therefore make it a priority to thoroughly understand the challenges that are likely to arise when having leases translated.
The translation process of one lease agreement is straight forward. The translation of potentially dozens or even thousands of lease agreements for the purpose of complying with ASC 842 is very different. Here are the need-to-know challenges of translating lease agreements for ASC 842 compliance. Read more
The Financial Accounting Standards Board (FASB) functions as an independent and not-for-profit organization that establishes financial accounting and reporting standards for all organizations that follow Generally Accepted Accounting Principles (GAAP). After nearly 10 years in the making, FASB announced its most recent standards update in February 2016:
ASU 2016-02, Leases (Topic 842)
Intended to address some of the most common criticisms of the current accounting and reporting rules, the most recent amendments focus on transparency. In the aftermath of the SEC’s 2005 report on off-balance-sheet activities, which recommended changes be made to lease agreement regulations, the FASB and the International Accounting Standards Board (IASB) developed and published a joint guidance that, in the words of FASB Chair Russell G. Golden, “responds to requests from investors and other financial statement users for a more faithful representation of an organization’s leasing activities.” Read more