The First 90 Days – How to Get Started
A Private Company’s Guide to the New ASC 842 and IFRS 16 Standards
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Help Navigate the First 90 Days
- Understand the Biggest Technical Accounting Challenges
- Assess your Existing Systems, Processes, and Controls
- Take an Enterprise-Wide Census of Your Leases
Answer the Key Questions
- Who to Include on the Project Team
- How Long Implementation Will Take
- How to Budget for the Project
The First 90 Days
The end goal of the new lease accounting standards is to provide investors with more transparency around your leasing contracts. Operating leases, which have historically been off- balance sheet will now be treated as assets and liabilities on the balance sheet under both US GAAP and IFRS. Operating leases represent the majority of leases for 93% of companies.
The challenges with these new standards should not be underestimated. In fact, some have called the new leasing standards the “biggest accounting change ever.” The International Accounting Standards Board estimates that over $2 Trillion in liabilities will move onto corporate balance sheets during this transition.
While most of the dollar value of these leases is associated with real estate, many companies will have a larger number of leases for non-real estate assets such as vehicles, IT and equipment.