Crunchafi

Step 3: Setup Reporting Entity

The Step 3 setup for a Reporting Entity in Crunchafi Lease Accounting requires an Administrator or Accounting Administrator to create at least one entity by specifying the accounting standard (FASB ASC 842, IFRS 16, or GASB 87/94/96), the initial application date (the start of the fiscal period adopting the standard, e.g., January 1, 2022 for ASC 842), local and functional currencies (except for GASB), and optionally adding locations, with the note that once leases are added, key settings cannot be changed and entities can be disabled via the administration panel.

Setup Reporting Entity, Initial Application Date, Local/Functional Currency, Add Location

These settings are available for users with the Administrator or Accounting Administrator Role.

  • Reporting Entity: A Reporting Entity is the entity for which financial statements are produced. At least one Reporting Entity must be created in order to enter leases into Crunchafi Lease Accounting. When creating a Reporting Entity, determine the following:
    • Accounting Standard: FASB ASC 842 or IFRS 16 OR GASB 87, 94, or 96
    • Initial Application Date: This is the date as of which the Reporting Entity will adopt the standard. Additional guidance below.
    • Local Currency: Identify the local currency for the Reporting Entity. This is the currency used to pay lease obligations. (Does not apply to GASB)
    • Functional Currency: Identify the functional currency for the Reporting Entity. This is usually either the local currency or the currency of its parent company. (Does not apply to GASB)

Note: After a lease is added to this Reporting Entity, the Accounting Standard, Initial Application Date, and Functional Currency cannot be changed.

  • Location: For each Reporting Entity, you have the option to add a Location. Locations can also be added from the Add Lease screen.

To disable a Reporting Entity, an administrator can edit the entity and uncheck the Enabled checkbox. Navigate to Administration - Reporting Entity and click the blue pencil to edit the Reporting Entity.

Initial Application Date Guidance

When selecting the Initial Application Date, keep the following information in mind:

  • The Initial Application Date is the first of the fiscal period in which you are adopting the standard. For most organizations following ASC 842, this is January 1, 2022.
  • What are incorrect Initial Application Dates?
    • January 1, 1900
    • March 1, 1896
    • January 1, 2010
  • For more information, view the article about Initial Application Date.
  • Use the Initial Application Date calculator to determine the correct Initial Application Date.