From the December-January 2007 issue of Treasury & Risk magazine

From the Ground Up

Given the number of decentralized transactions involved, their complexity and their overly manual nature, lease accounting has traditionally existed in the shadows of many companies. Increased scrutiny on the part of regulators and accounting rule setters has changed that, as has recent advances in automation. San Francisco-based Captara Corp. is one of the vendors advancing the art of bringing more standardization to large company leasing. Now, Captara has taken its Web-based, on-demand solution into a whole new category, with functionality aimed at keeping track of real estate leasing transactions and looking for ways to improve them. With the release, companies will have a single solution for enterprise-wide leasing activity involving equipment, information technology, transportation, telecommunications and real estate. "Real estate leasing has caused a lot of problems because there's a lot of complexity," says Rick Ludlow, CEO of Captara. "Our focus on real estate functionality is to provide customers with an end-to-end solution for all their leasing needs."

As with its earlier equipment lease solution, Captara's real estate leasing application gives a company greater visibility into its leasing arrangements and a workflow that can be traced for compliance requirements. It also provides employees who deal in leasing arrangements a consistent set of criteria when classifying leases, based on FAS 13 classification and reporting functionality. Such issues as whether a lease is land-only or includes a building, or whether leasehold improvements were made, can change a reporting outcome, depending on how agreements are structured and documented. The Captara system offers finance executives analysis tools that help determine cost strategies involving such things as lease-versus-buy and early buyout decisions. Since it's an on-demand solution, Captara can make universal updates in the program to reflect any rule changes that can be easily downloaded and incorporated by customers. "When they put these things on their balance sheets, they're going to be right."

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