Cloud Computing for ASC 842 Implementation
The current standards for lease accounting have gone through a significant change due to the introduction of ASC 842. This change has put additional pressure on organizations to ensure proper implementation for their lease accounting procedures. One solution that solves many of the problems associated with this implementation is cloud computing.
What is ASC 842?
ASC 842 is a lease accounting standard issued by the Financial Accounting Standards Board. This standard affects every firm that leases assets such as real estate properties, vehicles, and equipment. In the past, lease obligations were off-balance sheet, but now they must be on the balance sheet as a liability and right-to-use asset.
Why Cloud Computing is Essential for ASC 842 Implementation?
Cloud computing has revolutionized the way businesses operate. It saves a considerable amount of time, money and resources in processes that would have otherwise been carried out on-premises. Here are some of the reasons why cloud computing is essential for ASC 842 Implementation:
Scalability
Cloud computing allows businesses to scale their operations up or down depending on their needs. The amount of storage and resources that a business requires for ASC 842 implementation can change, making cloud computing a perfect solution.
Lesser Cost
Installing hardware and software on-premises can be costly. Cloud computing eliminates the need to purchase and maintain on-premises infrastructure, saving organizations a considerable amount of resources that would have otherwise been utilized for infrastructure maintenance.
Flexibility
In traditional on-premises solutions, businesses may need to wait for software updates, which can be a significant delay. Cloud computing eliminates these delays by providing updates as soon as they are available, making it easier for businesses to stay up-to-date with the latest technology trends.
Increased Security
Cloud computing provides better security compared to traditional on-premises solutions. Cloud data centers are equipped with the latest security tools and techniques that can easily prevent theft, cyber-attacks or any other security breach.
Examples of Successful Cloud Computing Implementation for ASC 842
Take, for example, John, an accounting executive who works for a global tech firm. The company wanted to implement ASC 842 as soon as it came into effect. They considered two options: on-premises installation or cloud computing.
John led the multi-disciplinary evaluation team that assessed the pros and cons of both choices. In the end, the team determined that cloud computing was the best strategy for them to implement ASC 842 successfully. The company used cloud computing solutions and ensured that all employees were trained to use the new system, which allowed for seamless adoption.
Another example is Sarah, a finance analyst who worked in the accounting department of a well-established telecommunications firm. They used cloud computing solutions to implement ASC 842 successfully, and the results were mind-blowing. The solution reduced costs by almost 60%, increased security and allowed them to scale up easily.
Conclusion
ASC 842 has brought about changes in the way firms carry out their lease accounting procedures. Cloud computing provides the best solution to successfully and efficiently implementing ASC 842. By choosing cloud computing solutions, businesses can experience scalability, cost-effectiveness, flexibility, and better security. Companies such as the global tech firm and telecommunications firm have already enjoyed the benefits of cloud computing solutions for ASC 842 implementation, and it is time for other organizations to follow suit and reap the rewards.
