Our CEO and founder, Michael Keeler, recently sat down with our global partner, EY, to discuss the state of lease accounting, covering topics including compliance standards and the opportunity it brings to transform leasing into a value center.
In this episode of the EY Better Finance podcast, Michael Keeler, CEO of LeaseAccelerator, discusses the state of leasing today, the impacts of COVID-19 on lease lifecycle management, how to invest in talent and technology, the role and expertise of managed service providers, and the transformation of the finance function amid a pandemic.
Partnering with someone on outcomes is a great way to hedge risks and still take advantage of all the automation cost takeout benefits.
The change to the lease accounting standard came with many other accounting standard updates, all created with the purpose of closing balance sheet loopholes. The most notable change was the capitalization of operating leases, which occurs under both FASB’s ASC 842 and the International Accounting Standard Board’s IFRS 16.
When the standard was issued in 2016, public companies had a 2019 deadline. They were also the first to realize the operational intensity of maintaining compliance (or rather the “total cost of compliance” as Michael Keeler refers to it) because most of them were managing leases on spreadsheets and it was very decentralized. Then in the middle of their first audits, the pandemic hit and along came the accounting impacts.
After initial compliance, the focus was then on maintaining sustainable compliance, and this remains a core operational challenge for Controllers with cross-functional, interdepartmental, global processes. Many companies are turning to the expertise and technology afforded by managed service providers, to structure and run these highly complex processes.
At the same time, the transition to the accounting standard has become an internal project to drive savings and free cash flow through automation and integration. Michael Keeler says:
We’re in a post compliance reality. Now it’s about, how do we use [leasing] as a strategic tool in our business?
Listen to the podcast now to better understand these key takeaways:
- The centralization in leasing decisions, both on the procurement side as well as the lease accounting side
- Automating the lease management lifecycle with a focus on the core unit of measure for your work
- Leasing as a strategic tool in the business for ROI savings and free cash flow opportunities with real estate and equipment leases
To learn more about LeaseAccelerator’s partnership with EY, visit our Alliances page on our website or check out our joint webinar, Leasing as a Managed Service: Introducing Global Leasing Services from EY and LeaseAccelerator.
Capturing and tracking lease accounting data is one of the biggest hurdles organizations face in managing the lease lifecycle.
One of the biggest leasing issues facing businesses today is inaccurate or missing lease data for initial ASC 842/IFRS 16 compliance and ongoing data maintenance.
Faced with a new set of rules powered by a remote and decentralized workforce, new cash management strategies, and shifting real estate and equipment lease needs...
In a recent Customer Connect webinar event, LeaseAccelerator’s CEO Michael Keeler joined leading finance and accounting executives to discuss critical topics like lease accounting...
If you’re in a private company or government organization, you get an extra year to prepare for lease management compliance with ASC 842 and GASB 87.