New Lease Accounting Compliance Implementation Timeline
The next couple of years are going to pose a revolutionary challenge for a large proportion of finance departments.
IFRS 16 and FASB ASU Topic 842 were announced in the first quarter of 2016 and already, businesses are beginning to realise the amount of work they will need to do in order to achieve full compliance in time for implementation.
The bulk of the preparation work stems from the current lack of centralisation and organisation of leases and contracts as general practice within companies.
"Many companies have disparate systems for tracking, monitoring, and housing lease agreements."
Sheri Wyatt, PwC
With intuitive software and efficient planning, businesses can secure compliance with ease and reveal opportunities for long term savings within their lease portfolio. To achieve this, they need to begin planning their preparations as soon as possible.
In order to help businesses get a better understanding of what is happening and what needs to be done between now and the official implementation of the new lease accounting standards, we’ve produced this timeline of the upcoming milestones.
Timing is key and businesses need to get a strong hold on their internal preparation timeline if they wish to meet the compliance deadlines and secure the return on investment many are looking for as part of the transition, they need to act now.
The first steps revolve around two key themes:
- Education – ensuring everyone who needs to know about the transition is aware of its impact.
- Centralisation – beginning the process of collating and reviewing your businesses complete lease portfolio onto one unified platform.
"The sheer volume of contracts involved and the significance of the impact on the financial statements make it essential to plan early."
Veronica Poole, Global IFRS Leader and UK Head of Accounting at Deloitte
The message coming from leading accounting professionals is that businesses need to begin the process sooner rather than later. If you require more information on the developments in lease accounting and require a solution that will secure compliance and savings, be sure to contact Innervision’s leasing experts here.
Alternatively, Innervision will be exhibiting lease accounting solutions at the UK’s largest accounting conference, Accountex. Tickets are completely free, so come and talk to our leasing experts in person on the 11th & 12th May at London’s ExCeL centre.