The first wave of ASC-842 adoption is long behind us—2019 for public companies and 2022 for private companies—but sustained compliance is still difficult. Many operators are now switching or implementing new ASC-842 software in 2026 to fix ongoing issues, replace manual processes, and prepare for smoother audits going forward.
A successful audit starts with putting the right system in place at the right time, and ensuring it supports the fiscal calendar your business actually uses.
Why Companies Are Implementing or Switching ASC-842 Software in 2026
Ongoing compliance issues.
Many companies—especially those with complex portfolios—still struggle with embedded leases, discount rate accuracy, ongoing modifications, and keeping schedules updated. These challenges create audit friction and increase the risk of errors.
Manual processes no longer scale.
Spreadsheets and manual data entry may have been enough for initial adoption, but they don’t hold up well as lease counts grow. Dedicated software automates calculations, centralizes data, and reduces the risk of material defects in financial reporting.
Audit readiness expectations are higher.
Auditors now expect automated audit trails, transparent logic, and complete documentation. Modern systems streamline required disclosures and reduce audit delays.
Operational efficiency and strategic clarity.
Centralized lease data helps operators identify occupancy cost savings, support lease-vs-buy decisions, forecast cash flow, and negotiate more effectively with landlords.
Business growth increases portfolio complexity.
As companies add new locations, expand into new markets, or restructure entities, manual tracking quickly becomes unreliable. A robust system ensures consistency across entities and periods.
Global reporting alignment.
Multinational operators also need solutions supporting both ASC 842 and IFRS 16 to maintain consistent global reporting.
The Best Time to Implement ASC-842 Software
For companies closing on December 31, the optimal implementation window is April to August. This gives accounting and real estate teams time to:
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Upload and validate lease data
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Reconcile key terms
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Test journal entries and reports in parallel
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Train teams without interrupting close cycles
This timing ensures your ASC-842 schedules are stable and audit-ready before Q4.
Use a System That Matches Your Fiscal Calendar
To avoid timing discrepancies in amortization, remeasurements, and journal entries, your system must support the fiscal calendar you actually use. Property Works supports:
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13-period calendars
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4-4-5 calendars (ending in last month or nearest end of last month, including last Q454 variations)
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4-5-4 calendars
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5-4-4 calendars
If the software cannot support your fiscal structure—especially retail calendars—you’ll face manual overrides and audit misalignment.
Lease-Admin-Driven vs. Accounting-Only ASC-842 Solutions
There are two types of tools on the market:
Lease-admin-driven platforms (Property Works)
These maintain accurate lease data, automate remeasurements, and support both accounting and real estate workflows. Because lease data is clean and centralized, ASC-842 schedules stay accurate throughout the year.
Accounting-only engines
These generate journal entries but rely heavily on users to maintain lease data manually. This leads to remeasurement delays and heavier audit workloads.
Why the Lease-Admin-Driven Model Simplifies ASC-842 Audits
Property Works integrates real estate, lease administration, and accounting data, allowing you to:
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Maintain clean, complete lease data year-round
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Produce faster, more accurate remeasurements
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Reduce manual adjustments
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Generate audit-ready schedules aligned to your fiscal year
This combined approach is what reduces audit pressure and improves long-term compliance.
The Bottom Line
A smoother ASC-842 audit starts well before Q4.
Mid-year implementation—paired with software that supports your fiscal calendar and eliminates manual processes—is the most efficient path to long-term compliance and operational clarity.
If you’d like to explore what implementation could look like for your organization, schedule a quick call with the Property Works team. We’ll walk you through a process designed to simplify every audit cycle going forward.
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