Part 1 Overview of the ASC 842 Standard

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2 Part 1 Overview of the ASC 842 Standard Michael Gregorski Technical Accounting Consulting RSM To start with, an overview of some of the key changes that impact lessees, which is the most significant impact under ASC 842. ASC 842 requires lessees to recognize all leases on the balance sheet resulting in a lease liability and right-of-use asset being reported. The one limited exception to this relates to a practical expedient which, if elected, applies to short-term leases, which are leases with a lease term of 12 months or less. One thing I would caution you, as part of this evaluation, is when you look at the lease terms to be evaluated, you must consider any renewals that are reasonably certain to occur. And what this means is you cannot avoid lease accounting under ASC 842 by solely having an initial lease with a term of 12 months or less, but that it includes renewal options that you expect will be exercised. A few other items that are highlighted on this slide that I'll just point out is that it's critical to ensure the completeness of the identification of your leases, including any leases that might be embedded in other contracts. This is due to the fact that now, as I said, all leases will be recorded on the balance sheet. Secondly, the right-of-use assets that are recorded in connection with the new accounting are subject to ongoing impairment assessments similar to other [inaudible] assets under the guidance of ASC With respect to finance leases, the classification factors are similar to today's capital lease classification criteria. However, there has been a fifth criteria that has been added, which could impact classification, especially for customized lease equipment. This new factor relates to: if the underlying asset is of such a specialized nature that it is not expected to have an alternative use to a lessor at the end of the lease term, then such a lease would represent a finance lease under the new accounting guidance. Finally, the new standard requires a or has a narrower definition of initial direct cost, which means that fewer costs will qualify for capitalization under the new standard. Another key change is that all lease and non-lease components - and a non-lease component is a separate component that provides a distinct good or service - need to be identified and accounted for separately. One exception to this is that a lessee can elect a practical expedient by class of underlying asset to not account for non-lease components separately. However, one thing I will caution you with respect to this is in doing so, it would result in a higher lease liability and a higher rate-of-use asset, since all of the payments are associated with the lease component. Having a higher right-of-use asset could result in an increased risk of impairment. One exception, even if the practical expedient is elected, is if the non-lease component represents inventory, it is still required to be accounted for separately. In addition, all distinct lease components must be accounted for separately. I say distinct, as there's a definition in the standard for evaluating whether or not lease components are separate and distinct. For those of you familiar with the new revenue recognition guidance, ASC 606, the criteria are similar to the guidance in ASC 606 regarding whether or not such lease component is capable to be used on a stand-alone basis or with other readilyavailable resources and whether or not it is highly interdependent or inter-related to other lease components. The one exception to this is even if a lease component is not deemed How to Jump Start Your ASC 842 Project Page 2 of 11

3 distinct, and therefore, generally would not be accounted for separately, if that lease component relates to land, it still has to be accounted for separately. In addition, when you're evaluating non-lease components, the evaluation of executory costs, such as access in payments that are paid essentially to reimburse a lessor for their cost of ownership, would not represent a non-lease component. Again, a non-lease component is a component that provides a distinct good or service, such as common area maintenance, that are typical in a number of real estate leases. One of the very significant changes relates to the increase in both quantitative and qualitative disclosures compared to legacy GAAP, which will now require lessees to accumulate, track, and monitor additional information related to leases that may not currently be maintained or readily available. This slide highlights some of those key new disclosure requirements. And as you can see, they are much more significant than current GAAP. There are a number of disclosure templates that are available that can help assist you to understand the disclosures further. So one additional - or a few additional key changes - that I just want to highlight between legacy GAAP and ASC 842 is the benefit of sale-leaseback accounting is now eliminated. This is due to the fact that, as I mentioned, all leases are now recorded on the balance sheet so you cannot get off-balance sheet treatment. In addition, the current build-to-suit lease accounting guidance, which is guidance that applies when the lessee is involved in the construction of the leased asset, has been eliminated. Under ASC 842, the new guidance focus is on who controls the asset and not whether or not the lessee assumed risks during the construction period. One key result of this is that it could eliminate certain build-to-suit assets and liabilities and result in those being de-recognized where they had originally remained on the balance sheet under legacy GAAP after the end of the construction period. A couple other key changes that don't necessarily relate to the accounting but should not be overlooked are, as a result of the changes to the balance sheet, certain financial metrics and other key performance indicators could be impacted, such as return on assets, debt-toequity ratios, and liquidity. In addition, you should review your debt agreements and related covenants to understand any potential impacts that could result as a result of the change in accounting under the new standard. Also, with respect to taxes, the recognition of leased assets and liabilities will likely impact the recognition and measurement of certain deferred taxes and liabilities, as well as could impact the assessment and recoverability of those. It could also have broader implications such as impacts on property apportionment factors for states that use property apportionment as part of the income allocation rules, as well as potentially sales and use of property tax. With respect to the tax assessment, it could be even more complicated, given the new tax reform that was recently issued. So we suggest that you engage your tax advisors early on in the process to have a comprehensive understanding of those tax impacts. So now moving onto impacts on lessors, overall, there are no significant changes for lessors. The same basic accounting model has been maintained. There are a few changes that are highlighted on this slide, including elimination prospectively of leveraged lease accounting, as well as certain changes with respect to lease classification that need to be considered based on evaluation of collectability and uncertainties. In addition, unlike lessees, lessors currently must account for all lease and non-lease components separately. However, there is a current exposure draft that is pending that would allow lessors to elect a practical expedient, to provide an option to combine lease and non-lease components when certain criteria are met. So stay tuned for that exposure draft, which is expected to be finalized very shortly. How to Jump Start Your ASC 842 Project Page 3 of 11

4 One of the most significant impacts for lessors also relates to expanded disclosures. As you can see on this slide, there are a number of incremental disclosures that are summarized. And again, entities should focus on these disclosure requirements sooner rather than later to ensure that the information needed can be obtained and maintained up front and, therefore, have accumulated such information to meet the disclosure requirements. So I know I walked through that fairly quickly. Again, I just wanted to give everyone a quick highlevel overview of the standard. As I said, some of the slides include additional information to provide you with additional guidance. Part 2 Transitioning to the New Standard Iyaye Amabeoku Senior Manager Technical Accounting RSM I'm gonna cover in the next few slides are some concepts relating to transition from 840 to 842. The first one I would like to touch on is the effective date of transition. For public companies, the adoption date is And for all other companies, the adoption date is All companies are required to use the modified retrospective approach, which requires you, or requires companie,s to apply the transition requirements as of the earliest date presented in your financial statement. So for public companies, that would be on and for all other entities, that would be However, the FASB has actually proposed a new ASU that is currently out. And we are hoping to at least get the response or get that finalized soon, which requires - or which states that - entities would be able to apply the transition requirements as of adoption date. So that would mean that the transition requirements and the standards would be applied as of , if you're a public company, and , if you are a private company or another entity that is not a public company. So in deciding whether or not your company would want to elect this new transition option that the FASB has proposed, we generally would, you know, suggest that you meet with your financial statement preparers, as well as any other stakeholders that have a stake in presentation like, you know, discuss with your bankers, if they require you to actually present comparative periods because this would be impacted by that because you wouldn't have... If you elect this transition policy, you wouldn't actually be presenting comparative periods. The transition would lead to a cumulative effect adjustment to your opening retained earnings. So there would be a lack of comparability between your 2019 financials and your 2018 or 2017 financials if you're public company or your 2020 and your 2019 financials if you're a private company. Next, I'd like to just touch on a couple of practical expedients that are included in 842. The first one I would like to discuss is the package of expedients, which is three expedients that need to be taken in as a package. So you can't elect one of the three. You have to take all three if you do elect this package. These are: you elect not to re-assess whether or not contracts are or contained leases. You elect not to re-assess your lease classification for your existing or expired leases, expired contracts. And you elect not to re-assess whether initial direct costs qualify for capitalization. So for companies that are choosing to elect this transition, this practical expedient, one of the things we noted or through discussions we have had with them is that it could save them on costs. It could reduce costs and level of How to Jump Start Your ASC 842 Project Page 4 of 11

5 efforts during the transition because you wouldn't need to re-assess all your contracts that exist, that currently exist, or have expired during the transition period. However, this may lead to higher right-of-use assets or liabilities due to leases that are currently identified as leases under 840 but would not be identified as leases under 842. So there are upsides and downsides to electing the practical expedients and you just need to weigh the benefits of both the pros and cons to decide whether or not it suits you or it's worth your time and effort. The next practical expedient is hindsight. And the hindsight expedient allows for hindsight to be used when determining the lease term and assessing impairment of ROU assets. Now, similar to the package of expedients, there are upsides and downsides to electing this expedient. One of the upsides could be you could, in essence, perform all of your reassessments and re-measurements prior to , thus reducing the impact of modifications post if you were looking at your lease term. A downside to this though would be it could lead to increased cost and level of effort to re-evaluate all the lease terms and re-assess any lessee option for these leases. One thing related to these two practical expedients is that they need to be applied consistently to all your leases or your lessor or lessee leases. And the package of expedients can be elected in conjunction with the hindsight expedient or they can be elected separately. Next, I'll just focus on some of the accounting policy elections that impact lessees. As Michael mentioned earlier, the standard impacted lessees more than it did lessors. So we'll just focus on a few of the accounting policy elections that were impacted by this new standard. The first one relates to the short-term leases. So these are leases that are less than 12 months. If you do elect this accounting policy, you would basically exclude leases that are less than 12 months from the 842 recognition. However, you would still need to track these leases for disclosure purposes. And it also requires careful evaluation of renewal options because if you have renewal options that you're reasonably certain to exercise and those options or those terms of those options push you over the 12-month mark, those leases fall out of the short-term classification and you do need to recognize them under 842. The next election relates to separating non-lease components from your lease components. This is applied by class of underlying assets. So you could decide for certain classes of assets, let's say, for example, real estate. In most real estate agreements, that we've been noticing in the work we've been doing, is that companies are generally splitting lease components, which is like monthly rent payments, and non-lease components, which is CAM, common area maintenance. So for companies that are already doing that, there's really no benefit to them to, you know, not continue to go along with this part. Whereas for non-real estate agreements where it may be a lot more difficult, more complex, to determine what the stand-alone tax is for those lease and non-lease components, companies may choose for those ones to actually apply this election to not separate the non-lease components from lease components. Another accounting policy election relates to discount rates. Non-public companies can actually elect to use the risk-free discount rate to their leases as opposed to identifying what the incremental borrowing rates are. In using the risk-free discount rate, you're actually applying that based on the term of the lease whereas the incremental borrowing rate is based on specific qualities of that lease, of that asset. So you need to weigh the pros and cons of using that option, as well. And then finally, the portfolio approach. The portfolio approach could be elected, and these are for portfolios of leases with similar characteristics, size, and composition. The one thing How to Jump Start Your ASC 842 Project Page 5 of 11

6 you would need to note though is if you do elect this approach, you would need to ensure that you have a very robust process in place to track and monitor the assets that are included in your portfolio because anything that actually changes your portfolio in such a manner that it's no longer that it's materially different from the application of individual leases in that portfolio, then you no longer have a portfolio and you would have to track these assets, these leases, on an asset-by-asset basis. Finally, I'll just highlight that although the FASB and the IASB have converged both IFRS 16 and ASC 842, there are some differences that exist. And we just included a slide in here for you to take with you and read and consider and just understand that if you do upgrade in both IFRS and US GAAP jurisdiction, that there will be some differences. And depending on the transition approach you've selected from IFRS, you could actually reduce some of those differences. I will hand it over to Scott to take you through the product approach. Part 3 Implementation Project Approach Scott Vanlandingham Principal Consulting RSM You know, we hear it from our clients oftentimes, around the lease accounting standard, the accounting folks will say, "You know, it's not quite as complicated as what we just went through with revenue." And from a technical perspective, that's probably true. The other thing that we're finding though is that there's much more of an operational component to 842, meaning that it's not a project, typically we see, that can just be done out of the CFOs or the controller's office. It really needs to involve a much broader range in the organization, including IT, the real estate function, obviously, the controller's function. And if you have distributed operations and you have accounting or finance out around the world or around the country, those folks need to be involved as well. And one of the big challenges is that a lot of times, companies just don't know what leases they have. And so there is a significant effort to get your arms around that question. What leases do we have? And what types of leases are they? And do we have multiple assets per lease or not? Where are they located? So that presents a significant challenge for most companies, which is why, in our approach here, we start with this assessment and strategy. And as we would do with any significant undertaking, we start off with a planning and a project initiation where we kinda fine-tune the details of what needs to be done at your organization and take into account who needs to be involved and what their schedules are and all that kinda thing, but once you get beyond that step pretty quickly you get into answering the question of, "What business requirements do you have?" And those are some of the things that I mentioned previously, but what is your current lease portfolio? And for each of those types of leases, we need to pull a decent sample of those to actually do a deep dive, to read each one, to abstract, as they call it, abstract out the key terms, to understand how the accounting is going to apply to you, to help give you a sense as to what kind of policies you're gonna be putting in place as a result of the new standard, if you need to make organizational changes, if there would be process changes that are required. And honestly, for the most part, for public companies, we are seeing that most How to Jump Start Your ASC 842 Project Page 6 of 11

7 companies really do need a software system to help with this, not only for compliance on day one, but on a go-forward basis, as well. Most companies enter into multiple leases every year. And they have other leases expiring. And so it's just an ongoing process that needs to be set up. And the technology is very helpful with that. So that's what we're seeing. So from the business requirements, we move into an impact assessment where we summarize for our clients, what are gonna be the big things that you have to work on as you get into implementation. Working with the auditor to make sure that they're on board. And then as we have noted here as a part of the assessment strategy, figuring out what will you do from the technology perspective. And then once that is done, we move very quickly into an implementation phase wherein you've got several things going in parallel. You've got the process design that I referenced going on. You've also got the system configuration going on, to make sure it reflects appropriately the policies that you're going to implement. And then there's this lease abstraction work effort, which can oftentimes, again, depending on the number of leases that you have, be a very significant effort. And then, of course, if you're implementing technology, you need to go through a proper process because this is a... Think of it as a subledger that's feeding your financials. So you need to make sure that you can show your auditor how the implementation process was controlled. And so that requires testing - a formalized testing plan - and that sort of thing. And then, of course, there's the user adoption and deployment. So at a high level, this is the work effort that we were asking about the timeline on. And we do see, as Iyaye mentioned, sort of that six-month timeline. And I was just looking to see here how many months we have. We're reflecting more than that here. And what we're finding is that this green bar is a little bit more difficult to consolidate, to shrink down. We've been able to find a lot of efficiencies in the blue bars around the assessment by doing things within RSM that our clients can benefit from. And one of those is going through a process internally that we did several months ago to look at the landscape of all of the lease accounting and enterprise lease software environment. Who are all the vendors out there? And we went through a process to evaluate them and come up with a short list of ones that we feel would be appropriate for our client base. Needless to say, LeaseAccelerator is certainly one of those. And we've had really nice success working with our clients combined with LeaseAccelerator. So that is a high-level timeline. And, you know, as the deadline approaches, we're finding more ways to collapse the timeline to still get people live in time. I would say that it's important to note it's a really good practice to leave some time before the end of your fiscal year to allow for the system to be up and running and everybody using it before you're actually reporting on it. So with larger companies, we're trying to get them done prior to their fourth quarter, so that their fourth quarter can go through their normal stops, controls, validation process and have this be part of that. And as time continues to march on, that's more difficult to do, but if you could have a month or two before the end of the year where you're done, you can see it operating. We think that would be to your advantage. This is just a block diagram to kinda illustrate what I've already said in terms of where the work effort is, right? There is significant work effort in the technical accounting piece. You see here the contracts analysis and the deep dive - significant work efforts. This high level of work effort down here on implementation is really that green bar that I had on the previous slide. And just due to the distributed nature of lease contracts in general and the number of stakeholders involved, we find that that is usually a bigger effort than what our clients might have been anticipating, which is why we have that one colored red. How to Jump Start Your ASC 842 Project Page 7 of 11

8 Part 4 Lease Accounting Software Alex Klein Solution Consultant LeaseAccelerator Everyone absolutely has to achieve compliance, and not just once, but every quarter and every year. And that approach needs to be thoughtful. It needs to be deliberate. And it needs to be measured. So at its core, Enterprise Lease Accounting, which I'll refer to it as ELA over the next 15 minutes or so, relies on proper lease classification, accurate accounting upon those classifications, including the ability to generate the necessary external disclosure and compliance reports, as well as internal management reporting to guide future leasing operations and decisions. And due to the complexity of the standard, the ongoing requirements and, of course, the heightened attention that leases are going to be subject to on corporate balance sheets. I think for all but the smallest companies, attempting to address the new standards without either an Enterprise Lease Management and Accounting system or ongoing outsourced assistance or a combination of the two will prove taxing on most controller organizations. So as we start to understand the factors leading to success, first and foremost, passing the initial and ongoing financial audits. This led us to the need to transform lease management and accounting processes within firms. And ultimately, companies should also seek to build the processes and employ the tools that can benefit them financially over the long term. For many companies, leasing is a de-centralized, but still a very important, component of their business operations. And that's not just for real estate, but it's for non-real estate assets as well - IT equipment, cars and other transportation fleet, manufacturing and production equipment. And it's not unusual for the controller's organization to really have historically been removed from those day-to-day activities. As I turn some attention to that wheel on the right of the slides, essentially, it's a lease management and accounting lifecycle, of sorts. There's main elements that controllers' organizations need to be cognizant of. First and foremost, it's that lease management and lease accounting go hand in hand. The requirement for asset-level accounting, easy integrations with GL ledgers and AP subledgers and, of course, the compliance reporting - the journal entries themselves, that lend to the required disclosure and maturity analysis reports. All of those rest with an organization being able to intake hundreds or even thousands of lease elements, initially and ongoing. And I'll continue to emphasize the ongoing because it, too, necessitates that leases can easily be classified according to an organization's accounting policies and judgments. And those rest highly on configurable corporate policies and controls to match the uniqueness of leasing operations across all of your companies. A first step that's not part of the slide, but is something that, you know, we kinda talk to a little bit, but lease accounting companies and partners are still really explicit about. And it's the precursor to gathering all of your leases. And it's simply gaining a complete understanding of your leasing landscape across the company. Writing it down and mapping it out, it will ultimately help you satisfy your auditor's questions on completeness or, you know, "How do you know you have all of your leases?" So this diagram here talks about the need for a subledger. So as a result of a heightened attention to lease accounting detail, specifically the need to generate asset-level accounting, How to Jump Start Your ASC 842 Project Page 8 of 11

9 it's logical that most companies will need to elevate how and where they perform the actual accounting functions, whereas companies that have subledgers for accounts receivable, accounts payable, fixed assets, and others, so too will lease accounting require subledger. And for that simple reason, the transaction volumes are extremely large. So where as a payable on a lease may generate only four accounting entries, lease accounting for even a simple operational lease can require 10 or more entries at the asset level each month. So populating that subledger is a combination of lease-specific information, payment terms, payment frequencies, amounts, and others, with information coming directly from abstract leases or in combination with data feeds from existing asset management systems: real estate, computers, and other IT equipment and fleet and logistics management platforms. Not all companies have any or all of these platforms, but those that do should seek to leverage the information in them, as they will most likely not go away. The ongoing need for those can certainly be discussed in the assessment and planning phase with folks at RSM. So information from those platforms is then also merged with data from procurement, sourcing, and contract management. And then output from lease accounting subledger feeds into what many, or what can be many ERPs, and even more underlying individual ledgers supporting the various entities and business units within the company. So most of you will need a platform that has the ability to create many subledgers to satisfy your corporate ERP structure. I've made reference to applicable accounting in a couple of the previous slides. And it's for very good reason. It's because that is what US GAAP and IFRS standards call for. Those standards and accounting interpretations discussed the portfolio approach that Iyaye mentioned earlier. However, that approach, even at its most granular, would need to be applied at the asset type or product category level. For example, all automobile fleets or all computer service or all buildings, because those are where policies and judgments are set. From LeaseAccelerator's experience with customers, the practical application of that is very difficult, unless those portfolios have nearly identical assets and have very little movement. So seemingly, this would apply to real estate, but under the new standards, these components come in many forms. We've had a number of questions on this today, but consider actual square footage occupied, which can exist on multiple floors, signage, parking, access to a drive-through, and, of course, the underlying land. And that's just for simple office space. Then consider telecom companies that have tower and ground leases or oil service companies with pipeline-embedded leases. And real estate starts to become complex. So as you start to consider the decisions and events across the lifecycle of the lease, there are those that we could say are basic where you would expect to be table stakes for a lease management and accounting platform such as lease term, purpose options, capturing residual values, and equipment return. But as you continue down the path of developing your technology strategy, you will find that they are not. Some systems are just not architected that way. And to those, the many activities and actions that can occur on a single lease truck or a laptop with such things as usage-based payments or moving equipment from one location or cost center to another - those become much more clear as to why the standards specify asset-level accounting. And it will start to become much more clear why compliance for day one is on everyone's mind, but maintaining ongoing compliance really proves to be the greater challenge for a lot of companies. So accounting classifications. The other guys on the call mentioned this in a couple ways. And I'm not gonna reiterate the various classification criteria. I will point out that they're very different for the current ASC 840 and the new ASC 842, as well as the current IAS and IFRS. Firms such as ours then can certainly help you understand those How to Jump Start Your ASC 842 Project Page 9 of 11

10 better, but what I would like to impress upon everyone is the importance of consistent application of those across your business segments, your entities, and your overall company. If you've not already discovered this, you will soon realize that many people throughout your company that are entering into leases have no knowledge of the impact of the leasing decisions on your balance sheet. That's because they're not accountants. They're in business operations. So while they may very well have P&L responsibility and understand the impact on expenses, lease classification and balance sheet treatment is not something that you could hope to have the majority of asset users and asset owners care about, nor would you want to. But once the lease is entered into, hopefully, as a result of a deliberate lease versus buy decision through the appropriate channels in the company, and enabled by a full-functioning enterprise accounting platform, what you do still absolutely need is consistent application of required policies and judgment decisions that the controller's function has put in place. So unless you have a very small portfolio of leases, which is gonna be handled by your accounting team or, you know, a leasing center of excellence, you need to enable leasing admins, asset owners, and asset users across your company to send leases into the platform. And that platform should have the capability to audit-classify what is being entered and really removing all necessary considerations of accounting policies from the business. As we move onto this slide on responsibility center accounting, so I touched on many of the elements of this diagram already. What I want to emphasize on this slide is really how a lease actually behaves from an accounting standpoint. So partly in consideration of those activities that can occur on an individual leased asset that I described, the many types of leased assets depicted in the lower half of the slide here, but moreover, as you move from operationalizing your technology strategy to your system design and your stakeholder impact and eventually your ELA platform configuration. If you're gonna be considering all of the various responsibilities and responsibility actors across your accounting ecosystem, the allocation of assets across multiple cost centers, the potentially differing judgment decisions across your leasing contract entity, mirroring a corporate hierarchy for department level P&L responsibility, how to handle lease assets assigned to projects, roll-ups or reporting lines to business. So while compliance is first and foremost on nearly everyone's mind, it really starts with effective internal reporting and responsibility accounting to ensure proper actions prior to having to report them externally. And here's where you'll start to find the various ELA solutions really start to differentiate themselves with only a small fraction of them really exceling here. Accounting reports. So the natural, or at least desired, extension of the effect of internal reporting and responsibility accounting and proper lease classification is to be able to generate the required reports for compliance. Some of them are basics, quantitative analysis or disclosure report, and ideally, one that needs no offline modifications or calculations that can be run out of your system and dropped directly into a 10K, a maturity analysis showing all of your lease applications, supporting amortization schedules, etc., and then logically, the ability to easily and automatically generate payment schedules and journal entries to upload to however many ERPs and instances of ERPs you have. And this is where Enterprise Lease Accounting systems, again, start to really prove themselves because you would have taken all the necessary steps to mirror your corporate functions in a platform. You've got the business processes in place to accurate the leases or you will, and you should expect the system to handle all of the accounting with no manual intervention, again, such that all anyone in the accounting functions need to do are run How to Jump Start Your ASC 842 Project Page 10 of 11

11 reports and know that the accounting is correct. This next slide here touches on transition accounting. This is gonna be a tough one to address for the large and obviously remote audience. And so the RSM folks mentioned a couple aspects of this such as the practical expedients and the various considerations between US GAAP and IFRS. And I think Iyaye also explained there are proposed changes, proposed ASC changes, from when companies need to initially apply the transition accounting. Again though, those changes are not gonna change the date of adoption or effective date for the public companies, nor will it change the transition accounting rule for existing, leases that calculates the adjusting entry using lease payments as defined under 840. It's really just a kind of a reprieve of some comparative reporting. And so these transition accounting rules are complex. And, depending on your portfolio, you might even have an existing debt covenants, you may have the need to continue ASC 840 accounting for, for some time. So the one takeaway that you should get from this slide is, as your evaluating go-forward technologies, be aware of those systems that have automated the transition accounting function and can create [inaudible] ledgers for re-measurement and ultimately, your go-forward ASC 842 record to report ledgers. Audit support. So just a last couple slides here. An extension of the accounting reports is really supporting your audit as well as functionality in the platform to permit auditors readonly access to those reports and visibility to a complete audit trail for each individual lease that's entered. These are functions you should seek out as part of your technology evaluation, including "as at" reporting, visibility to all changes at the asset level, and easy means to reconcile, and a one-stop place that can house all of the pertinent documents related to a lease in a system where it can be easy to find whether that lease goes to a simple start-to-finish lifecycle in the platform or it goes through modifications and you have multiple-related leases within your platform. Lease Accelerator. We often talk about three golden requirements for lease accounting solutions. And we relate these requirements to those generally accepted auditing standards and five common assertions of existence and occurrence, completeness, valuation allocation, rights and obligations, presentation disclosure. Assertions that your internalexternal auditors will seek to measure and prove out. Of the utmost importance to keep in mind as you're developing internal processes and evaluating technology is that both of those lend to affect the policy, processes, and controls for your lease data management, and to ensure that accounting principles are being appropriately applied to accounting for your lease obligations on the balance sheet and income statement. And I think here the final slide is Sarbanes Oxley in a controlled environment. So a quick touchpoint on SOX controls. Because you're going to be employing a lease accounting subledger, which effectively is gonna serve as an extension of your ERP, all of those controls that you've been putting in place over the last 15 or plus years across your ERP, and the internal processes, will need to be evaluated for similar application to your enterprise lease accounting. How to Jump Start Your ASC 842 Project Page 11 of 11