Oil and gas company achieves ASC 842 compliance in a month
Company meets audit deadline and saves time, money, and resources
This oil and gas Company, with approximately 100 employees, is part of a larger holdings company which is audited by a Big 4 accounting firm. During their 2021 audit in March 2022, the Company was told by their holdings company that they needed to implement ASC 842 as of January 1, 2021. This included the appropriate journal entries and disclosures for the adoption date as well as year-end close on December 31, 2021. The holdings company planned on issuing their audit within a month, so full ASC 842 implementation needed to be completed as soon as possible.
Up to this point, the Company was managing all their leases with spreadsheets, which was not sufficient for ASC 842 compliance. After realizing they had 58 leases, including equipment, buildings, and vehicles – many of which were short-term leases – they knew they had to implement a solution.
Since the Company already used Whitley Penn for back-office accounting and consulting, they enlisted the help of Whitley Penn’s lease accounting team for help. With less than a month to implement ASC 842, the Company had to quickly gather their lease data. This data included trial balances for four companies that consolidate, a lease listing containing partial lease information, and all lease PDFs.
The EZLease solution helped the Company become ASC 842 compliant and meet the audit deadline. The Company is now able to easily keep track of their leasing information. By implementing EZLease, the Company has better visibility into their lease data and more confidence that the lease data is accurate. The Company is also saving time, money and resources and providing better reporting to their holdings company. “They were glad to get compliant and not hold up the audit,” noted Hines.