Tuesday, July 19, 2016
ACCOUNTING SYSTEM WILL ADDRESS LESSOR AND LESSEE REPORTING
I have been developing an accounting capability for the PAMS-DCF analysis system as noted in a few posts back. I am happy to say that it is progressing nicely. The article on ASC 842 is taking a backseat to the system development as developing the accounting capabilities needed for the new lease reporting on both the lessor, and more importantly the lessee side, will directly influence the article. As the lessee is now being bound to the Albatross of Present Value analysis, and is being asked to essentially maintain a "Lessee Portfolio" or more likely two portfolio's of all leases/loans it is obligated to, our accounting system is being designed to be used by both sides of the transaction. Interesting concepts of using a "Portfolio Approach" at least in the initial booking and the ability to compare individual deal bookings to a portfolio approach are complicating the development somewhat but are showing promise for making the job more doable. Bear with me folks, both the accounting capability and the article on ways to approach the challenge will be done shortly. If anyone has any insights into what should be included in a workable system, let me know. The system is being designed to do financial reporting, not billing and collections. That wheel of accounting is already addressed by myriad accounting systems for big and small companies. Our system is designed to provide the balance sheet and P&L reporting of the lease/loan periodic accounting figures required while remaining flexible for easy change in the portfolio composition. We are excited about getting it done.