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2 Copyright ©2021 Tango. All rights reserved. FASB ASC 842 & IFRS 16 COMPLIANCE | LEASE CONTROLS About Tango As the market leader in integrated workplace management system and store lifecycle management. Tango has successfully partnered with over 500 leading companies and we apply that deep knowledge and those best practices to our world-class solution. As the only true end-to-end solution on the market, we help customers find, build and manage retail and office locations in a single suite, leveraging AI and deep learning techniques. Our cloud-based SaaS and mobile solutions are utilized across more than 140 countries by concepts ranging f rom those having small footprints to large global brands with more than 40,000 locations. Tango Lease was built f rom the ground up with FASB ASC 842 and IFRS 16 compliance and has been validated by leading independent accounting firms. Our unparalleled depth of industry experience combined with our leading solution has resulted in dozens of major corporations switching to Tango for their lease administration and accounting requirements. System / IT Controls When leveraging systems to manage your leases, you'll need to establish controls over the source data and any interfaces or transfers to ensure data integrity. Additionally, as these systems will perform financial calculations in support of the new lease standards, system access controls and segregation of duties will eliminate errors and potential f raud. Under the Sarbanes-Oxley Act, companies are required to perform a f raud risk assessment and assess related controls. Built-in reviews and approvals through workflows will add a layer of responsibility to accounting records by proving that transactions have been seen, analyzed, and approved by appropriate authorities. Third Party Suppliers In some circumstances, certain aspects of your lease portfolio are actually managed by a third- party supplier, and your ability to know when your leases have changed – i.e. are modified, renewed, extended, or cancelled – can be compromised. You need to ensure that not only do you have complete information at the start, but that any modifications are communicated as soon as they happen. You need to enact robust processes for tracking, reviewing, and approving these changes. Ongoing Risk Management With change comes risk, and your organization must consider any risks related to this regulatory change, both now and in the future. This means there must be an ongoing process to monitor any controls you have implemented, and a process to modify them should you identify any areas of risk. To make sure enhanced controls related to your leases are implemented properly, companies are wise to document the design and implementation stages. Proper planning and documentation can heighten the confidence a company's management, auditors, and audit committee have that the controls are solid. There is some evidence that with these new standards will come enhanced scrutiny f rom your auditors, who are expected to enhance their control testing. Getting robust control systems in place, as well as documented and tested, will ensure you are well positioned for any scrutiny.

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