By Mike Hammerslag
The new FASB and IASB guidelines were announced in 2016, so it should come as no surprise that lease accounting reporting is changing.
While a survey by Robert Half Management Resources revealed that 80% of CFOs at U.S. companies have not formally begun the transition, it did confirm that more than half had taken steps to diagnose the level of effort that will be required to become FASB and IASB-compliant under the new standard. These steps include:
- developing a project plan
- identifying a team to lead the transition
- writing new procedures
Building out a cross-functional FASB and IASB Compliance Team is one of the first and most important steps. You will need to identify both a project manager who will be accountable for the overall execution of the project, and select a decision-maker to approve the changes and investments you’ll make.
Subsequently, fill out your team by choosing other key contributors to help you locate leases and evaluate the necessary data. Be sure to recruit members from the real estate department, operations, procurement, legal, finance, accounting and IT.
Finally, it will also be beneficial to broaden your search into other departments to identify the following lease types:
Lease Types: Signage beyond what is provided in the real estate lease
Human Resources/Personnel Department
Lease Types: Company car leases and vehicle leases
Real Estate Department
Lease Types: More benign or smaller leases such as cell tower transponders
Lease Types: Gym equipment, kitchen equipment in a cafeteria/dining room
Once you’ve located your leases, you’ll need to mitigate the risk of transitioning to the new standard by capturing, converting, and loading the data accurately. A proven technology partner can support you throughout the adoption process. Accruent has a track record of successful data conversions and our team of experts ensures your organization can make a seamless transition. Contact us today to learn more.