STRATEGY POLICY INVENTORY DATA
SYSTEM PROCESS
CONTROL SUSTAIN
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ROAD TO LEASE COMPLIANCE
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DATA
controls for leased asset accounting is challenging. Transform the challenges of
meeting the new FASB and IFRS lease accounting standards and your new lease
system into an opportunity to improve SOX compliant leasing processes.
Lack of centralized procurement processes
for non-real estate leases
Procurement processes vary greatly from centralized enterprise-wide functions
to decentralized departmental level procurement, and everything in between.
The result is a major data trap as you don't know what you don't know when it
comes to buried contracts and data sources. Service contracts and embedded
leases are the main culprits, as real estate leases tend to be managed centrally
in one system.
Some companies may use the new lease accounting practices as a motivating
factor to centralize procurement of equipment and services. At a minimum, new
procurement policies and processes need to be designed and rolled out across
all departments to make sure all contracts are classified as either lease or non-
lease, with the former being abstracted into a centralized lease administration
and lease accounting system.
Data is unavailable for
the lookback period
Finding, or in many cases reconstructing, the data required to comply with the
two-year FASB ASC 842 lookback period has been a substantial challenge for
many organizations. In this case, procrastination may pay off as FASB is likely
to eliminate the lookback period any day now. While this is a welcome easing
of the burden, the deadline still looms large for public companies.
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DATA
