Solving ASC 842 Challenges in Large Enterprises

Implementing the ASC 842 lease accounting standard has been anything but straightforward for large organizations. With complex lease portfolios, decentralized data, and ever-tightening reporting deadlines, ASC 842 is pushing even the most seasoned finance teams to rethink their processes.

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ASC 842, issued by the Financial Accounting Standards Board (FASB), requires companies to record most leases — including operating leases — on their balance sheets. It was designed to increase transparency for investors and stakeholders, but it also brings significant accounting and operational challenges.

According to a 2023 PwC Lease Accounting Survey, 62% of private companies and 49% of public companies said implementing ASC 842 took longer than expected, often due to data collection and system limitations.

So why is it so difficult for large enterprises to comply — and what are the smartest ways forward?

Why ASC 842 Is Especially Tough for Large Enterprises

Big companies often manage hundreds or thousands of leases spread across departments, locations, and business units. That scale alone introduces risk and inconsistency, especially when data lives in outdated systems or on spreadsheets.

Common pain points in enterprise-level implementation include:

  • Decentralized data: Lease agreements stored in multiple formats across departments
  • Manual processes: Reliance on spreadsheets makes reconciliation tedious and error-prone
  • Complex contracts: Embedded leases, modifications, and multiple components can confuse classifications
  • Inadequate systems: Existing ERP tools often lack the flexibility to handle lease calculations and disclosures
  • Limited cross-functional coordination: Accounting, real estate, legal, and procurement teams often operate in silos

In short, the challenge isn’t just technical — it’s structural.

Key Solutions That Make Compliance Easier

Successfully implementing ASC 842 starts with better organization and the right tools. The companies that have navigated the transition most effectively focused on systems, collaboration, and continuous process improvement.

Here’s how large enterprises can overcome the biggest hurdles:

  • Centralize lease data into a dedicated platform that integrates with accounting systems
  • Automate calculations for right-of-use (ROU) assets, liabilities, and amortization schedules
  • Standardize lease entry processes to avoid errors and reduce manual work
  • Train cross-functional teams so legal, finance, and operations all understand the reporting requirements
  • Perform regular audits to catch discrepancies before financial reporting deadlines

These steps don’t just help with compliance — they improve accuracy and efficiency across the board.

Why the Right Technology Matters

Trying to manage thousands of leases in Excel is like doing surgery with gardening tools. Specialized lease accounting software gives finance teams the automation, validation, and reporting they need — without having to rebuild ERP systems from scratch.

Good software solutions for ASC 842 should offer:

  • Centralized lease repository
  • Built-in accounting logic for ASC 842 compliance
  • Configurable reports for disclosures and audits
  • Integration with ERP systems (like SAP, Oracle, NetSuite)
  • Role-based access to facilitate collaboration across departments

With automation, tasks that once took hours — like remeasuring leases after contract changes — can be done in minutes with fewer errors.

Post-Implementation Isn’t the End

One of the biggest misconceptions about ASC 842 is that once you’ve “gone live,” the hard part is over. In reality, lease accounting under ASC 842 is an ongoing process. Contracts change, leases renew, and companies evolve — so systems and controls must stay agile.

Best practices post-implementation include:

  • Setting a cadence for internal reviews or lease audits
  • Monitoring for embedded leases in vendor contracts
  • Updating policies as FASB guidance evolves
  • Assigning lease compliance ownership to a cross-functional team
  • Evaluating software performance yearly to ensure it still meets needs

Treating lease accounting as a continuous cycle — not a one-time project — leads to stronger financial oversight and fewer surprises.

Final Thought

ASC 842 implementation is a heavy lift, especially for large enterprises with sprawling lease portfolios. But the challenge also presents an opportunity: to modernize processes, improve interdepartmental collaboration, and adopt smarter technology that delivers real long-term value.

Compliance doesn’t have to feel like a burden. With the right strategy, ASC 842 can be a springboard for operational clarity, financial accuracy, and enterprise-wide trust in your numbers.