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Beyond the Balance Sheet: Smarter Compliance with new IASB and FASB lease accounting rules
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Transcript of Beyond the Balance Sheet: Smarter Compliance with new IASB and FASB lease accounting rules
Current challenges and opportunities presented by the lease accounting standards
Top findings from a global study of 179 senior finance and real estate executives
In this presentation:
The new lease accounting
standards will add more than
USD 1 billion
in liabilitiesto balance sheets of large
public companies in Europe,
the U.S., and many other
countries.
More than half of companies
expect Debt/Equity Ratio and Return on Assets to
worsen.
Pending changes to global lease accounting rules will create a negative effect on critical financial performance ratios
92 percent of executives consider their companies not prepared.
Many companies expect implementation to include more than 1,000 leases.
Nearly two-thirds of senior executives expect new IT systems to comply with the new lease accounting standard.
IBM-funded survey of senior finance and real estate executives highlights challenges created by new lease accounting rules
WHO SHOULD CARE?
IT
Executives
Real Estate
Executives
Finance
Executives
Because …
… facilities portfolios
will require increased
efficiency to minimize
balance sheet impact
Because …
… finance, real estate
and other functions will
require new or
upgraded IT systems
Because …
… new accounting
rules increase the
complexity of financial
forecasting
Anyone who is foolish enough to think they can
do this on a spreadsheet is only a few quarters
away from having a big problem.John Merino,
Chief Accounting Officer, FedEx
How IBM TRIRIGA helps …
Identifies under-performing and
under-utilized facilities Metrics highlight red, yellow or green
status of performance against targets
Models alternative planning
scenariosAdd or remove facilities to increase or
decrease space use within trial plans
Compares financial and non-
financial returnsShows side-by-side comparison of
financial and operational impacts of
proposed lease vs. buy decisions
… generate higher
return on leased
assets
Alerts to required lease accounting
reviewsGenerates required lease accounting
reviews on a company-defined basis
Automates lease accounting controlsGenerates amortization schedules and
financial analysis upon approvals
Audits decisions, approvals and
processesCaptures user actions and approvals with
before and after data values changed
… simplify
compliance with the
new rules
Pre-built data structures and
processes for all lease typesDelivers real estate and equipment lease
types “as-shipped”
Third-party lease abstract supportDelivers pre-built spreadsheets and data
exchange to accelerate lease data
capture
Integrates with financial and other
critical business systemsStreamlines data exchange between
lease accounting , Point of Sale and
financial accounting systems
… accelerate
preparedness with
new rules
Download the complete study:
ibm.co/1dI7a77
Join the conversation on LinkedIn:
http://linkd.in/1JLU1Hq