NEW LEASE ACCOUNTING STANDARDS EXPERT PANEL WEBINAR

Transcription

1 NEW LEASE ACCOUNTING STANDARDS EXPERT PANEL WEBINAR

2 Meet Our Expert Panelists Bruce Conway Mark Koppersmith Scott Dunnihoo Vice President Operations Director Product Management Director Customer Service Colleen Tigges Director Solutions Consulting

3 Question #1 What type of General Ledger entries need to be made?

4 General Ledger Updates Monthly Entries Commencement Midterm Event End of Term

5 Question #2 What are the economic advantages of equipment lease versus ownership?

6 What are the Economic Benefits of Leasing? Lease Buy

7 Question #3 Has the SEC released any guidance related to the implications of the 5 year table (Selected Financial Data) in an entity s 10-K upon adoption in 2019?

8 The Five Year Table Example

9 Question #4 What should we set aside from a resource and budget perspective to handle this project?

10 Resources and Budget Implementation On-Going Project Resources Data Collection Program Resources Software/ Technology

11 Question #5 What are the best software options for lease accounting?

12 What Software Options are Available? Real Estate Administration Construction Space//Facility Planning Building Maintenance Lease Administration Real Estate, IT, Fleet, etc. Asset Level Sub-Ledger Generates Debits/Credits Lease Accounting Software Options IT, Fleet Asset Management Asset Tracking Maintenance & Repair Lease Administration Fixed Asset Accounting General Ledger Procurement ERP (Customize)

13 Question #6 How do I get an inventory of what leases I have? What types of data do I need to comply?

14 What Do We Lease? Office Space Trucks Forklift & MHE Computers Retail Store Autos & Vans Manufacturing Servers/Storage Warehouse Ships & Barges Medical Tech Copiers

15 Where to Find the Data? Lessor Systems Accounts Payable Real Estate Asset Management Contracts Management Tracking Spreadsheets

16 Question #7 What are the key challenges with leases for fleets, IT and other types of equipment (versus real estate)?

17 Scale is One Example of a Difference Stakeholders Countries Facilities Leases Real Estate 10s 10s 100s 100s 100s 1000s 10s 10,000s 1000s Budget Owners Stakeholders Countries Assets Leases Fleet, IT & Equipment Leases

18 Question #8 Who outside of the accounting organization should be involved in the project?

19 Who Needs to Be Involved? Lease Accounting Project Team Technical Accounting Financial Reporting Lease Administration Corporate Treasury Information Technology Procurement/ Supply Chain Corporate Tax Real Estate Fleet Logistics Data Center

20 Question #9 Do we need a sub-ledger for leasing data? How are companies approaching this?

21 Lease Accounting Sub-Ledger General Ledger Payroll Ledger Accounts Payable SubLedger Accounts Receivable SubLedger Fixed Asset SubLedger Inventory SubLeger Lease Accounting SubLeger Investments SubLeger

22 Question #10 What are the biggest unknowns or risks, that we should be aware of?

23 Biggest Risks and Unknowns Asset Level Financials Policies & Controls Income Taxes Resources & Expertise Lease Accounting Top Risks Debt Covenants Systems Readiness Midterm Events Embedded Leases

24 Question #11 What new policies and controls need to be in place?

25 New Policies and Controls Single Enterprise Repository Authorization to Lease What Should & Should Not Be Leased Asset Level Tracking Lease vs Buy Analysis Verify Accuracy of Data

26 Question #12 For IT leases (i.e., printers/copiers) in Europe and Asia, how are people treating service contracts that charge a cost per copy instead of a lease? Do these agreements fall into the scope of the new standard?

27 Printers & Copiers (Variable Pricing) Is there an identified asset? No Yes Does customer have the right to obtain substantially all of the economic benefits from use of the identified asset? Yes No Contract Does Not Contain A Lease Does customer have the right to direct the use of the identified asset? No Yes Contract is or contains a lease

28 Question #13 What types of internal and external Initial Direct Costs should be included as part of the Right of Use Asset?

29 Initial Direct Costs Typical Initial Direct Costs Include Exclude Commissions Payments made to an existing tenant to incentivize that tenant to terminate the lease Legal fees Costs of evaluating lessee s financial condition Costs of negotiating lease terms and conditions Overheads

30 Question #14 What business processes will be impacted by the new lease accounting standards?

31 Which Business Processes are Impacted? Quarterly & Annual Reporting Real Estate Management Logistics & Warehouse Management Sourcing & Procurement Tax Planning Invoicing & Payments Budget Planning Lease Versus Buy Monthly Close IT & Data Center Management

32 More Answers Download our Lease Accounting Handbook handbook Who to put on the project team What data to collect What steps to take for implementation How to handle international leases

33 Closing Remarks Webinar Replay will be Later in the Week Slide Downloads will be Available us at: Or Visit:

34 Thank You