Quick guide to
compliance policy for
application of the new lease accounting standard
～Free] "3-step guide to compliance with the new lease accounting standard
Free of charge] Tools and system documents to support the implementation of compliance
For those who have trouble collecting contracts from the field, such as real estate and substantive leases
Supervised by a certified public accountant
Contract collection sheet for the new lease accounting standard
For those who want to estimate the impact of applying the new lease accounting standards
For those who want to estimate the impact of applying the new lease accounting standard
Those who are looking for a low-cost system to comply with the new lease accounting standards
Saas for new lease accounting standard
HUE Lease Accounting
What is the new lease accounting standard?
The new lease accounting standard is a new accounting standard for leases issued by ASBJ in September 2024.
Under the new standard, operating leases and real estate leases that were previously accounted for off-balance sheet will, in principle, be required to be accounted for on-balance sheet.
Almost all large Japanese companies will be required to comply with the new standard for fiscal years beginning on or after April 1, 2027, so it is necessary to consider how to respond to the new standard, including preparations such as system modifications. Let's proceed with preparations based on an understanding of the contents of the standard.
Explanation of the policy to comply with the new lease accounting standard in three steps
The application of the new lease accounting standard will significantly increase the scope of on-balance sheet accounting, which is expected to have a significant impact on the practices of not only the accounting department but also various other departments.
In order to comply with the new standard, it is important to prepare step-by-step as follows: (1) confirm the scope of impact → (2) estimate the amount of impact → (3) examine the workflow and systems. Below, we will explain the specific steps to be taken in accordance with steps (1) through (3).
Three steps to comply with the new standard
(1) Check the specific
scope of impact
(2) Estimate the amount of impact
on your company
3) Examine business flow and
systems
Step 1: Check the specific scope of impact
(1) Check the specific
scope of impact
(2) Estimate the amount of impact
on your company
3) Examine business flow and
systems
First, let's catch up on the specific impact of the new lease accounting standards.
Increased workload due to increased journal processing
With on-balance sheet processing, for example, many new journal entries are required for leased real estate, which until now only had to be paid on a case-by-case basis. Therefore, companies that did not have finance leases before are expected to face a particularly heavy workload.
Step 2) Estimate the impact to your company
(1) Check the specific
scope of impact
(2) Estimate the amount of impact
on your company
3) Examine business flow and
systems
In formulating a policy to comply with the new lease accounting standards, the need to implement a system will vary depending on the size of the impact of the on-balance sheet.
In some cases, depending on the scale of the impact, Excel may be sufficient, while in other cases, it may be necessary not only to implement a system but also to reform the operation of the system.
In deciding on a response policy, it is necessary to estimate in advance how much the impact will be on your company.
A tool for estimating the impact of the new lease accounting standard is now available free of charge!
Step 3) Examine the business flow and system
(1) Check the specific
scope of impact
(2) Estimate the amount of impact
on your company
3) Examine business flow and
systems
After estimating the amount of impact, the actual policy will differ greatly depending on whether it will be handled by a system or by Excel. The method of calculating the amount to be recorded in a journal entry may be considered. However, there may be cases where Excel is not sufficient to handle the complicated management of re-estimation and impairment of leases.
Please refer to the following seminars and materials when considering your workflow and systems.
Thorough review by a CPA with "no discovery" Can HUE's new lease accounting functions be used in practice?
Mr. Masahiko Inoue, a certified public accountant and a leading expert on lease accounting, will be invited to thoroughly review whether the functions of "HUE" meet the requirements of the new lease accounting standards and whether they are useful in practice.
At the same time, he will organize the points of view to be kept in mind when evaluating the new lease accounting system, using a comparison point table.
HUE Lease Accounting" SaaS for new lease accounting standards
HUE Lease Accounting is a SaaS-type solution that "easily and conveniently" meets the new lease accounting standards, condensing the know-how accumulated over 15 years of providing the fixed asset/lease management system "HUE Asset".
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