Equipped for Success
A Joint LeaseAccelerator and PwC Equipment Leasing White Paper
This PwC equipment leasing white paper explains the complex world of equipment leasing including the key organizational, process, and systems challenges associated with managing assets from airplanes, medical devices, and construction equipment to furniture, laptops, and printers. Equipment lease management platforms can not only help you comply with the new lease accounting standards, but also lead to significant operational efficiency as well.
The vast majority of companies lease equipment and real estate, with many of them leasing more assets than they realize. The kinds of assets they lease can vary widely—from airplanes, medical devices, and construction equipment to furniture, laptops, and printers. If the leases are well managed across equipment life cycles, leasing can serve as a cost-effective method whereby companies acquire the equipment they need to run their businesses while minimizing the risks of owning assets outright.
In an effort to increase leasing-activity transparency, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) jointly issued new guidelines for lease accounting. The guidelines could affect almost all entities to some extent. Lessees will likely see the most significant changes because they will be required to recognize virtually all lease-related assets and liabilities on their balance sheets for leases with terms of more than 12 months. (See sidebar “What are the main changes?”) Implementation deadlines for the new standards start in 2019, but companies that are calendar-year-end filers will have to provide three years of comparative income statements beginning on January 1, 2017.