The COVID-19 pandemic has deeply affected business in one way or another. This has enormously stressed the leasing industry. The social distancing and work from home measures along with emergency regulations have forced non-essential businesses, physical stores, and offices to close. The lease accounting and management related to offices, warehouses, retail stores have become more complex and companies are facing multiple financial challenges.
Lease obligations and lease provisions need closer scrutiny in the light of COVID-19 as it will directly impact lease accounting.
As every lease agreement has its own obligations and provisions for the lessor and the lessee, you must undertake the lease evaluation process amidst the COVID-19 pandemic. Assess the lease terms, payments, events, business spending, current expenses, and check if there are any unnecessary recurring charges.
Having a clear understanding of different aspects of lease agreements will help you to save money.
Lease Provisions and Pandemic
COVID-19 is unprecedented and therefore you are advised to analyze lease provisions. It will proportionally impact lease obligations, lease accounting, and even business continuity itself. You must review the provisions like force majeure and insurance. The obligations and responsibilities of a lessor and lessee in case of casualty, for maintenance, and business interruptions need to be revisited.
Moreover, the government-mandated regulations due to the pandemic also need to be considered for including exceptions and better lease management.
Effects on Lease Accounting
Various financial components like lease concessions, lease modifications, changes to payments, and provisions and obligations on part of the lessor and the lessee have changed the dynamics of lease accounting and management. More focus has to be given to the FASB guidelines and accordingly account for rent abatement, partial termination, or reducing the scope of lease, impairment, etc.
How Lease Accounting Software helps?
A lease accounting software will help you in complying with FASB ASC 842 and IFRS 16 standards and calculations. To leverage the complete benefits of a lease software, you must choose lease management along with lease accounting as provided by Yardi Corom Lease Management. This will help you in finding cost-saving opportunities. It reduces time to analyze and keep update about multiple lease accounts and ultimately maximizes benefits amidst COVID-19. Find how lease accounting software and lease management software combined will help you.
Accounting for Lease Concessions
Financial Accounting Standards Board – FASB has provided a comprehensive guideline on lease payments and lease modifications due to COVID-19 with Topic 842 and Topic 840.
In Corom Lease Management by Yardi, you can amend leases to account for lease term extensions and charge schedule modifications. It further helps to recalculate the present value of rent payments and amortization schedules resulting from lease modifications.
Lease Information at a Glance
Yardi Corom Lease Management enables you to centralize your portfolio data. This makes it easy to understand the obligations, provisions, and payments of different lease agreements. You can keep track of critical dates, events, notices through personalized notifications. Companies with multiple and global portfolios may find it difficult to find all details without a lease management software.
The available centralized lease information at a glance in Yardi Corom saves valuable time and maximizes productivity.
Lease Accounting Software will help you to manage and at the same time minimize financial risks during COVID-19. Additionally, with easy access to information on lease obligations and provisions, you can make informed decisions that will help overcome financial challenges due to COVID-19 induced changes.
Better management of financial responsibilities with Yardi Corom will open endless cost-saving opportunities.
For more details, visit www.yardicorom.com.