February 21, 2017
Tango Engaged BKD to assess the software solution’s compliance with FASB ASC 840 and ASC 842 and IFRS lease accounting requirements
Tango announced today that they are the first vendor in the Lease Accounting space to receive independent verification from a top accounting firm that the lease accounting calculations in Tango’s solution are consistent with FASB Accounting Standards Codifications ASC 840 and ASC 842, and International Accounting Standards Board’s IFRS 16, Leases.
“BKD has received numerous questions from our clients and others regarding the complex issues that are included in the new leasing standards. As such, we realize that when adopted, this new approach for accounting for leases will require more monitoring and recordkeeping by Companies. We recommend that Companies evaluate the potential impacts on the financial statements, particularly with regard to financial ratios and other key financial metrics. These changes may have unexpected impacts on debt covenants or other contracts with lenders, vendors, employees, regulators, etc., that may require revision to maintain the original intent,” says Kerry Fitzgerald, Director, BKD.
Unlike other solutions in the marketplace that will require retrofitting to ensure compliance, Tango’s Lease Accounting functionality was built from the ground up to comply with ASC 840 and ASC 842 requirements.
“Tango leveraged a variety of lease accounting experts during the design and development of our solution to ensure our compliance with the ASC 840, ASC 842 and IFRS 16 standards,” says Pranav Tyagi, Tango’s President & CEO. “Because of the extensive testing that we completed, including the project that we engaged BKD to assist us with, our customers and their auditors can be assured that all the accounting entries generated through the solution can be relied upon to adhere to all required standards.”
Tango’s lease solution has gained significant traction in the market, and has already been selected by several global multi-brand retail clients across the grocery, pharmacy, apparel, home furnishings and specialty retail verticals. These global customers require compliance to both US ASC 840 and ASC 842 standards and international standard, and unique to Tango’s review process was the inclusion of IFRS 16 standards.
The independent review assessed how Tango’s solution treats common scenarios that impact compliance including data capture, the operating/finance classification test, detailed accounting schedules and journal entries for both FASB ASC 840/ASC 842 and IFRS 16 considerations.
In conjunction with the Lease System Review, Tango also recently announced the successful completion of its SSAE No. 16 (Statement on Standards for Attestation Engagements), Reporting on Controls at a Service Organization (SOC 1) Type 2 examination, in accordance with the American Institute of Certified Public Accountants (AICPA) guidelines.
The SSAE No. 16 SOC 1 Type 2 Exam provides independent, third-party verification that an organization’s policies and procedures meet or exceed industry standards, and therefore provides Tango’s customers with the highest standards in process, controls and procedures.
“The meeting of these standards in conjunction with the third-party verification of our solutions means that Tango is the only truly independently verified vendor in the space for ASC 840, ASC 842 and IFRS 16,” concludes Mr. Tyagi.