Data capture is either automatic or manual. You have the option to manually enter agreement details in structured form and attach a scanned contract together with supporting documents. If the lease origination process is done in another system, you have two options for data upload: a)
Soft4Lessee is a software solution for lease accounting under ASC 842 standard, available both in the Cloud (in SaaS mode) and on-premise. Businesses with large portfolios of operating leases will be impacted by the change in accounting standards, as the new standards require lessees to recognize assets and liabilities arising from operating leases on the balance sheet. Soft4Lessee will help your business to: - Plan the transition to the ASC 842 standard calculate the impact and choose one of the transition options; - Stay compliant with the standard upload new leases every month, let the system calculate values and download G/L transactions. The Role Centre of the finance user (Lessee back-office) info@soft4lessee.com | www.Soft4Lessee.com Soft4Lessee Main Features Lease Agreement Data Management In Soft4Lessee, you have a database of your lease agreements, with three major statuses new agreements under consideration, active leases, and archived leases (expired, or terminated early). Data capture is either automatic or manual. You have the option to manually enter agreement details in structured form and attach a scanned contract together with supporting documents. If the lease origination process is done in another system, you have two options for data upload: a) import from Excel sheets or XML data files, and b) populate data via webservice. The data upload function can be used for data migration from a legacy application. You can download your lease agreement details from Soft4Lessee to Excel, or feed them to other systems via webservice. Active leases can be amended, and the system keeps an audit trail of all changes made. Lease Agreement Card info@soft4lessee.com | www.Soft4Lessee.com Lease Unit Master Records (equipment being leased) You can have one or multiple (unlimited) units on lease agreement, with cost price, residual value, and a unique ID for each unit. Data capture methods are a) manual entry, b) import from Excel or XML, c) via webservice, the same methods as listed above for lease agreements. You can add a download an asset list, together with lease details and depreciation details, and make asset-based reports. Asset grouping for accounting purposes is fully configurable (e.g. motor vehicles, ships, aircraft, office equipment, etc.) in order to group assets with similar characteristics. The asset class drives the standard depreciation term, which can be adjusted per individual asset. Lessor Records In Soft4Lessee you have a database of lessors, with contact details and a lease portfolio for each lessor. Keep Track of Lease Status In addition to major lease statuses (under consideration, active, archived) the system gives you the option to track leases by more detailed statuses requested, quoted, signed or withdrawn, activated, extended, early-terminated, buy-out, expired. Determine Lease Term For ASC 842 purposes, the lease term is determined by a number of circumstances whether you are reasonably certain to execute the purchase option, or extension option, or terminate the lease before the end of the term. For accounting purposes, the lease term may differ from the contractual lease term. info@soft4lessee.com | www.Soft4Lessee.com Calculate Lease Liability Based on the given parameters, the system calculates lease liability as the present value of lease payments, and the present value of amounts due at the end of the lease term, taking into account purchase or termination options. The system will automatically adjust lease liability as the circumstances change. The system calculates the initial measurement of lease liability at the commencement date, and subsequent measurements at the end of each reporting period (e.g. monthly, quarterly or early). Calculate Value of Right-of-Use Asset (RoU) The system calculates RoU Asset value taking into account lease liability, costs before lease commencement and the expected cost of asset return (e.g. costs of equipment dismantling, costs of restoring leased premises). If the lease liability is re-assessed, the RoU asset value changes accordingly. Projection and Simulation The Soft4Lessee system enables you to calculate the projection of lease liability over the lease term (by each lease, group of similar leases, or overall portfolio) and calculate the projection of asset values over the asset lifetime (by each unit, asset class, or overall portfolio). Determine Asset Depreciation Term RoU Asset is depreciated over the lease term or over the useful life underlying the asset. If the lease transfers ownership of the asset to the lessee by the end of the lease term, or the lessee is certain to exercise the purchase option, the asset is depreciated over the useful life of the asset (the system has a pre-configured useful life parameter per asset category). Interest on Lease Liability The system calculates interest and creates G/L postings at the end of the reporting period, using either the interest rate implicit in the lease or the lessee incremental borrowing rate. info@soft4lessee.com | www.Soft4Lessee.com Non-lease Components If you have a composite contract that includes leases and services, the non-lease component is separated and posts to the operating expense account, separately from interest expense and asset depreciation expense, as required by ASC 842. Lease Modifications The system allows lease modifications after the commencement date and will calculate the impact on lease liability and right-of-use asset. The system will produce G/L postings to reflect any lease modification. Variable Leases If you have leases with variable lease payments dependent on an index (like the Consumer Price Index) or reference interest rate (like LIBOR, EURIBOR), the system is able to calculate re-pricing and reflect it in accounting, as per ASC 842 requirements. Re-measurement As circumstances change, the system is able to calculate adjustments to lease liability and right-ofuse asset value, and produce G/L postings accordingly. Calculate RoU Asset Depreciation The system calculates depreciation using one of three methods: straight-line, declining-balance, or production-based. The system produces postings to G/L accounts by asset class. Cash-flow Reporting The system will split cash-flows into the principal portion and the interest portion of lease payments. info@soft4lessee.com | www.Soft4Lessee.com Foreign Currency If you have leases denominated in a foreign currency, the system will re-measure lease liabilities using closing currency exchange rates at the end of each reporting period. The exchange rate difference is recognized as a gain or loss, not affecting the Right-of-Use asset value. General Ledger Integration The Soft4Lessee system will produce required G/L transactions at each due date and at the end of the accounting period. You can download G/L transactions in detail or at summary level and feed them into your general ledger system via webservice integration, or via an Excel or XML file. If you are using Microsoft Dynamics NAV as your ERP system, then G/L integration is totally seamless. Data Import/ Export As already mentioned above, the Soft4Lessee system has comprehensive functionality for import and export to/from other systems, using one of the following methods (or combination of methods): webservice, Excel files, XML files. Using this feature, Soft4Lessee can interface with other asset management, contract management systems, the general ledger system, and the management reporting system. ASC 842 Practical Expedients With Soft4Lessee, you can choose to apply practical expedients allowed for short-term leases and low-value leases (posts to operating expenses). Transition to ASC 842 On the first adoption of ASC 842, you can choose which transition option to apply, as Soft4Lessee supports both options allowed by ASC 842 standard: o Comparative method o Effective date method info@soft4lessee.com | www.Soft4Lessee.com View of the Soft4Lessee System Lease Agreement Card Section of Initial Measurement info@soft4lessee.com | www.Soft4Lessee.com Projection of lease liability and right-of-use asset values over the term (system calculated, datasheet view) info@soft4lessee.com | www.Soft4Lessee.com Projection of lease liability, per lease groups (system calculated, chart view) info@soft4lessee.com | www.Soft4Lessee.com Overview of General ledger account, related to lessee accounting info@soft4lessee.com | www.Soft4Lessee.comMicrosoft Word for Office 365