Welcome to New Lease Accounting: Planning a Project for FASB and IFRS Compliance

Transcription

1 Welcome to Planning a Project Before you get started. Please view the GoToWebinar Attendee Slides to get acquainted with some of the GoToWebinar features Choose your audio option: If you dial in, please make sure Telephone is selected Test your audio option When you first join, you are in listen-only mode and are automatically muted Type your question into the questions box as necessary There will also be a Q&A session at the end The control panel will collapse automatically when not in use. To keep it open, you can click the View menu and uncheck Auto-hide Control Panel. See the GoToWebinar Attendee Slides Power Point in your control panel for more detailed instructions costarmanager.com

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3 Planning a Project for FASB and IFRS Compliance A 12 Step Guide for Project Management Matt Waters, CPA, MBA, CGMA costarmanager.com

4 About Today s Presenter Matt Waters, CPA, MBA, CGMA costarmanager.com

5 12 Steps for Lease Accounting Compliance 1. Obtain a full understanding of ASC 842 and/or IFRS Set a compliance timeline 3. Meet with a cross-functional group of leasing stakeholders 4. Organize a project team 5. Select a software solution for lease management and reporting 6. Compile a list of all leases 7. Evaluate compliance with existing ASC 840 accounting standards 8. Evaluate the HR impact and adjust staffing/training plans 9. Set internal accounting policies around leasing 10. Evaluate the process flow for leases and adjust to ensure efficiency 11. Review processes, software, policies and pro-forma results with auditors 12. Set up a sustainable process for managing leasing data

6 1. Obtain a full understanding of ASC 842 and/or IFRS 16 What Exactly Is a Lease Under ASC 842 and IFRS 16? Virtually all leases will need to be recorded on the balance sheet There are some complex changes in the new rules, and all companies should leverage the knowledge and expertise of subject matter experts for complete compliance

7 2. Set a compliance timeline Most companies will need to be in compliance by the end of 2018 with data going back to early 2017 Many company-specific details of the new standards can affect compliance timelines Some companies may find it is advantageous to adopt new standards early

8 3. Meet with a cross-functional group of leasing stakeholders Leasing has been a traditionally decentralized process Centralizing lease data will be key to success Communicate early to obtain buy-in from all stakeholders Groups to consider including in stakeholder meetings and communications: Real Estate Property Management and Lease Administration Maintenance Logistics IT Procurement Legal Financial Planning Accounting Treasury Program or Project Management

9 4. Organize a project team Accounting Due to the subject matter and the requirements for financial reporting IT Because the solution will likely involve implementing new software Program and Project Management To add expertise in keeping the project on track/budget Property Management and Lease Administration Because of interest in the solution selected and will most likely be responsible for some data input

10 5. Select a software solution If you re already a CoStar Customer, Congratulations! Skip this Step! If not, critical questions to assess software: Standard, Ad Hoc and Custom Reports? Audit trails of data changes? Cost for future upgrades? Cost for unlimited users? SSAE16 audits annually for SOX? Ingrate with ERP and IWMS systems? Software recommended by CPA firms? Proven FASB and IASB functionality?

11 6. Compile a list of all leases

12 Now it s time for a POLL! costarmanager.com

13 6. Compile a list of all leases Don t forget embedded leases!

14 7. Evaluate compliance with existing ASC 840 standard Preparing for the new lease accounting rules may expose compliance issues with current requirements Keep materiality (financial significance in terms of GAAP) in mind Understand the impact to practical expedients Review with auditors

15 8. Evaluate the HR impact and adjust staffing/training plans Ensure accounting staff can handle compliance tasks in addition to regular duties Consider hiring additional resources or consultants for the project Consider training needs to implement new processes

16 9. Set internal accounting policies around leasing New standard is more principles-based and will require more robust company policies and controls Set new policies and discuss with auditors

17 10. Evaluate the process flow for leases and adjust to ensure efficiency Consolidating and organizing lease data helps ensure lease data reliability Ensure leasing practices are efficient and eliminate waste An efficient lease management process can produce cost savings and better negotiating leverage with vendors

18 11. Review processes, software, policies and pro-forma results with auditors Audit teams can add expertise for project success Reviewing early with audit associates can save time during the next annual audit

19 12. Set up a sustainable process for managing leasing data Leasing will continue to be a valuable practice for business operations Existing leases will need to be maintained and new leases will need to be set up Give some thought now to a sustainable and efficient process

20 Get the 12 Step Project Plan White Paper This guide co-authored by the former lease accounting manager with the largest home improvement retailer in the U.S. offers organizational leaders practical, real-world insight on how to create a lease accounting compliance plan.

21 Questions? costarmanager.com

22 Planning a Project for FASB and IFRS Compliance A 12 Step Guide for Project Management Matt Waters, CPA, MBA, CGMA Thanks for joining us today! costarmanager.com

23 Thank you for attending Planning a Project for FASB and IFRS Compliance To conclude. Remember to check out our event web page at Look out in 48 hours for a post webinar with A recording of the webinar A post webinar survey Make sure you answer the post webinar survey for a chance to win $100 Amazon gift card. A gift card will be given away after every webinar costarmanager.com