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A non-profit organization partnered with Solaris to simplify ASC 842 lease accounting and ensure accurate implementation.
A non-profit housing organization was transitioning to the new lease accounting standard, ASC 842. This required a retrospective adjustment for the audited financials of 2021, adding complexity to the year-end reporting.
The Challenge: Navigating a New Lease Standard
The organization’s finance team had to navigate the first-time implementation of ASC 842, ensuring accurate lease classifications and fair market value assessments. Managing the complexity of lease arrangements, including financial leases and subleases, added significant pressure.
The retrospective adjustment to prior periods and the accurate recording of lease liabilities were key to meeting audit requirements and maintaining financial accuracy.
The Solution: Guided Expertise through ASC 842 Adoption
Solaris stepped in to guide OppCo through the intricacies of ASC 842 adoption. Using both historical and current real estate data, Solaris helped the organization assess fair market value, calculated the lease IRR, and created a clear lease schedule.
Solaris then proposed and recorded the necessary accounting entries, ensuring prior period adjustments were accurately made. Throughout the process, Solaris worked closely with their finance team to empower them to take control of future accounting entries.
"Solaris made ASC 842 adoption so much easier. Their expertise gave us confidence in our financial reporting and helped us get through the audit smoothly." - Corporate Controller, Non-profit organization
The Impact: Flawless Compliance, Future-ready Processes
The organization successfully navigated the complexities of ASC 842 implementation, impressing their CFO, Controller, and external auditors. No corrective actions were needed, and they now has a clear roadmap for managing lease accounting moving forward—allowing them to focus on their mission with confidence.
Technical Accounting
With Solaris’ expert guidance, the organization overcame the challenges of ASC 842 adoption and strengthened their financial operations, demonstrating their commitment to transparency and accuracy.
