1 / 25

Understanding the Lease Accounting Standard Change Impact

NexInfo "Understanding the Lease Accounting Standard Change Impact" explores the significant implications of recent changes to lease accounting standards. We provide in-depth insights into how businesses can adapt to new regulations, streamline compliance, and optimize financial reporting. Our expert guidance ensures a smooth transition, minimizing disruptions while maximizing transparency and accuracy in lease management. Learn more at - https://nexinfo.com/

kumar_27
Download Presentation

Understanding the Lease Accounting Standard Change Impact

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. How to Achieve Compliance with New Accounting Standard - ASC 842 June 28, 2018 Prepared by: Hemal Parikh @ NexinfoSolution

  2. Company Information NEXINFO SUMMARY: Consulting company focused on helping clients achieve Operational Excellence via an optimal blend of Business Process & Software consulting services Deep domain expertise, including: Integrated Business Planning, Sales & Operations Planning, Enterprise Resource Planning (ERP), Product Lifecycle Management, Predictive Data Analytics, Security & Compliance, and Business Transformations Founded in 1999 and managed by computer industry & business process professionals Clients include emerging companies and Fortune 1000 corporations Recognized in the industry, including features in Gartner Reports, The Silicon Review (50 Smartest Companies of the Year 2016 and 10 Fastest Growing Oracle Solution Providers 2017), and CIO Review (100 Most Promising Oracle Solution Providers 2015) CLIENTS: CORPORATE INFO: HQ in Orange County, CA with offices in Redmond, WA, Chicago, IL, Bridgewater, NJ, Dublin, Ireland, Chennai & Bangalore, India Operations across the United States, Europe (Ireland, UK, Switzerland, Belgium) & India

  3. Presenter Information Name: Hemal Parikh Experience: Solutions Architect with 14 years of experience in delivering financial solutions across industries & geographies. Oracle Certified Implementation Specialist with experience in leading ERP transformation engagements, recommending industry best practices & implementing Business Optimization initiatives for Enterprise Customers across industry domain. 

  4. Agenda • Introduction • Financial Accounting - Change Impact • Sample Use Case • Financial Compliance – Road Ahead • System View – Lease Accounting • Implementation Challenges

  5. Submit questions via chatReadiness Checklist Reminders

  6. Bracing the Impact Survey of 100 US Companies with highest dollar value of lease obligation

  7. Quick Glance on Change • What is the Change? • Current GAAP, requires only capital leases to be recognized on the balance sheet. • Change: The new Accounting Standard Code (ASC 842) requires both Finance & Operating leases to be recognized on the balance sheet for Rights & Obligations. • Reference:https://www.fasb.org/jsp/FASB/Page/ImageBridgePage&cid=1176169253354 • Who is impacted? • Affects all organizations small or large that lease Assets such as Real Estate, Vehicles • Construction Equipment etc. • When is the change effective? • It is effective for public business entities for fiscal year beginning after Dec 15, 2018. And for all other organizations ASU is effective year after i.e. Dec 15, 2019. • How to address the Change? • Organizations need to start accounting for Operating Leases on their balance sheet as assets and liabilities, which use to be off the Balance Sheet before. • Impacting organizations’ financial reporting.

  8. Change to Accounting – Financial Reporting Impact

  9. Sample Use Case Source: PWC

  10. Financial Compliance Road Ahead

  11. Financial Compliance - Road Ahead Full of Twists & Turns

  12. Leverage System Features – Lease Accounting • Digitizing: Lease Details captured centrally in system. • Supports centralized & decentralized operation of Leases. • Ease of Tracking & Monitoring your Leased Assets • Single Source of truth for you Accounting. • Financial Reporting & Compliance • Automatically Schedule your Lease Payments • Lease Renewals & Retirement • Automate accounting of your Asset, Liability & Expenses aligned to amortization schedule.

  13. Lease Accounting Process Flow (Lessee) Create Lease Asset Establish Lease Contract Lease Asset Accounting (Amortization) Schedule Lease Payments Financial Reporting Trial Balance / Income Statement Pre-Compliance Post Compliance

  14. System Snapshot– Oracle Cloud ERP PV: 62,092.80 Cost: 63,592.80 Liability: 63,592.80

  15. System Snapshot– Oracle Cloud ERP

  16. System Snapshot– Oracle Cloud ERP Right of Use - Asset Lease Liability A/c

  17. System Snapshot of Usage – Oracle EBS • Report Financial Results using • Liability Balance with Payment/Interest Accrual • ROU Asset Balance • Generate Report using BI Publisher • Portfolio Summary Report • Portfolio Detail Report • Lease Detail Report

  18. System Snapshot – Oracle PeopleSoft

  19. System Snapshot – Oracle PeopleSoft

  20. System Snapshot – Oracle JD Edwards

  21. Key Implementation Challenges • DATA - Unstructured & disperse data • Decentralized Lease Operations • Centralized Lease Operations, but data spread across spreadsheets, Hard copy paper agreements, Scanned pdf files. • PROCESS – Manual & in-efficient process to track Leases. Requires streamlining of Lease Tracking & Reporting business process. • SYSTEM – No standard system to capture, track & account for Leased Assets. Need to select the System which seamlessly integrates with our ecosystem. • DEPLOY –How to implement the ideal combination of System, process & data collation within the regulatory timeline.

  22. How can we help you ? • We can help to ‘Fast Track’ your leasing transformation • Business Process Advisory • Financial Accounting Expertise • Technology & Data Expertise • Robust ‘Fast Track’ methodology using • Diagnostic Workshop to capture inputs “Impact Analysis Findings” • Analysis Workshops for deep dive 4-6 Week Implementation Plan • Our Differentiators? • Breadth of experience in implementing Financial Accounting Applications for enterprise customers across multiple Industries • Technical expertise across multiple Product lines – Oracle Cloud, EBS, PeopleSoft, JDE, SAP, etc. • Standardized process & template-based approach to expedite data collection & upload of your lease data into target Accounting System.

  23. Special Bonus! • Sign-up for our Diagnostic Workshop by July 15, 2018 and receive these benefits: • Lease Accounting Functionality implemented for USD $42K* • 40% discount on our original pricing • Lease Accounting Functionality deployed within 4-6 weeks • * Based on NexInfo methodology & other terms applicable • Implementation Package Includes • Business Process Consulting to streamline your leasing process • Extend you ERP system by configuring Lease Accounting System Rules • Upload your lease data into ERP system using our template-based approach • CRP-based design & review process • Test scripts to enable users with User Acceptance Testing (UAT) & sign-off • Training & system handover • Pre-requisites • ERP products we support: Oracle ERP Cloud, EBS, PeopleSoft, JDE & SAP • Client to procure license from Product vendor (if required) • ERP product version should have Lease Accounting feature available • Reach us at LetsTalk@nexinfo.com for additional details

  24. Q&A

  25. Contact Us

More Related