The Importance of Roll Forward Accounting Period in Lease Accounting

What is Roll Forward Accounting Period?

Roll forward accounting period is a crucial concept in lease accounting, as it outlines the financial increases or decreases on the balance sheet between reporting periods. It allows businesses to track and report changes in lease agreements, providing transparency and accuracy in financial statements.

Advantages of Roll Forward Reporting

Roll forward reporting offers several advantages for lease accounting:

• Improved Accuracy: By recording and tracking changes in lease agreements, roll forward reporting ensures that financial statements accurately reflect the current status of leases.
• Enhanced Transparency: Roll forward reporting provides transparency by clearly documenting the changes in lease terms, such as modifications, renewals, or terminations.
• Better Decision-Making: With up-to-date information on lease agreements, businesses can make informed decisions regarding lease renewals, expansions, or terminations.

Roll Forward Reporting Use Cases

Roll forward reporting is widely used in lease accounting for various purposes, including:

• Compliance Reporting: Roll forward reports help businesses comply with lease accounting standards such as ASC 842 by accurately documenting lease changes.
• Financial Analysis: By analyzing roll forward reports, businesses can gain insights into lease expenses, liabilities, and potential risks associated with lease agreements.
• Audit and Review: Roll forward reports provide a comprehensive audit trail, facilitating internal and external reviews of lease agreements.

Best Practices for Roll Forward Reporting

To ensure effective roll forward reporting, businesses should consider the following best practices:

• Maintain Accurate Lease Records: Keep lease agreements and related documentation organized and up-to-date to ensure accurate roll forward reporting.
• Implement Robust Tracking Systems: Utilize lease accounting software or systems that can track and record changes in lease agreements automatically.
• Regularly Review and Reconcile Lease Changes: Conduct periodic reviews to reconcile lease changes with the roll forward reports, ensuring accuracy and consistency.

Roll Forward Reporting Simplifies ASC 842 Compliance

ASC 842 is the new lease accounting standard that requires businesses to report lease liabilities on the balance sheet. Roll forward reporting simplifies ASC 842 compliance by providing a clear and comprehensive overview of lease changes between reporting periods.

Importance of Roll-Forward Reports in Lease Accounting

Roll-forward reports play a crucial role in lease accounting, improving compliance and streamlining tasks. They provide valuable insights into lease agreements, ensuring accuracy, transparency, and informed decision-making. A lease accounting solution can further enhance the efficiency of roll-forward reporting, reducing manual efforts and improving overall lease management.