FASB and IASB will release new lease accounting standards in 2015, with an expected implementation date of December 31, 2018. For SEC reporting purposes, companies will have to provide comparable reporting between the existing and destination standards for up to three prior years. For the many international companies that report under both accounting regimes, this poses quite a challenge. By January 1, 2016, they will need to have complete, accurate and auditable reporting in place in order to transition smoothly. That’s four different sets of books to maintain. On top of that, the new standard will create the administrative burden of tracking deferred income taxes as a result of timing differences, which implies another set of books.
“How to Prepare Now for the Coming FASB Lease Accounting Changes” explains the coming FASB lease accounting changes and how to establish, maintain, and manage up to five sets of books in order to successfully transition to the new standards. This 9-step plan is designed to help finance, accounting, and procurement executives manage the transition quickly and easily.
You will need at minimum 6-12 months to create and implement processes and systems. As with any change-management project, you should start by defining the objective, scope and strategy of the project or process. Companies must:
- Understand the new rules to determine compliance requirements;
- Start and complete a transition process – now; and
- Develop an ongoing process for complying with the new standard.
The plan covers financial, tax, and operational impacts on equipment and real estate leases and explains how to prepare and manage them. The paper describes how to create and maintain a database of documents and data in order to ensure completeness, accuracy and audit-ability of your data.
Download the whitepaper now »