It is very likely that FASB and IASB will finish the new lease accounting standard by the end of 2014, which will require the capitalization of most operating leases longer than twelve months, and which will bring new audit scrutiny to the lease portfolios and leasing practices of every company that follows GAAP. Finance executives can use the Lessee Handbook as a roadmap for updating their processes and controls, and to improve compliance and the financial performance of leasing and asset management operations, as they prepare for the new lease accounting standard.
The Sarbanes-Oxley (SOX) era was the last time that the audit community focused on leasing processes and portfolios from a controls and reporting perspective. This resulted in a significant spike in costly and time-consuming restatements, which lessees can avoid when the new lease accounting standard is issued by applying the recommendations in The Lessee Handbook. Most importantly, the 20 best practices for lessees can help your firm not only with compliance but saving money as well. By following the guidance therein, you can turn your compliance costs into a positive cash flow, continuously improving process and driving a sustainable ROI for your business.
Despite the Sarbanes-Oxley Act, and the millions of dollars that companies have spent on complying with its terms, the leasing process inside most companies remains an opaque, complex area of corporate finance. The process is often characterized by poor lease accounting, decentralized management, broken processes, and incomplete systems. Such issues will lead inevitably to numerous control and compliance problems and costly financial mistakes.
In an effort to meet the many compliance standards facing lessees, today’s finance executives must focus on finding ways to maintain the accuracy of their accounts while simultaneously improving the company’s financial performance. The SOX legislation raised the stakes by introducing criminal penalties for company executives if financial statements do not fairly and accurately represent the financial condition and results of a company.
The unfortunate reality is that executives lack the visibility, controls, and resources needed to properly manage their lease and asset portfolios. As a result of the demands of the coming lease accounting standard, as off-sheet operating expenses shift to on-sheet assets and liabilities, most companies cannot afford poor practices that result in compliance exposures. In addition, prudent financial managers understand that poor practices eventually lead to financial mistakes, underperformance, and losses.
The Lessee Handbook provides timely, practical guidance and insight to lessee finance executives, helping them to:
- Learn about the many compliance requirements that apply to your equipment leasing portfolio
- Identify the problems with leasing operations typically found in corporate lessees
- Understand what is required from their team to fix operations and drive bottom-line results
- Apply best practices to achieve financial performance goals, meet compliance requirements, and scale
- Learn how to scale and control your equipment leasing process around the globe
- Build a business to improve compliance and the financial performance of leasing and asset management operations
Using innovative practices, finance executives can improve leasing and asset management operations while attaining lease compliance. Leasing represents an aspect of financial management that, in most companies, could benefit from the diligence that results from compliance. Through effective leasing and asset management operations management, businesses can reduce costs, increase efficiency, and comply with pertinent regulations.
Download the Handbook to learn more.