Tracking New Leases on Day Two and Beyond
Your leasing portfolio is constantly changing. Each year your business units will sign hundreds, if not thousands, of leases for buildings, computers, forklifts, rail cars, shipping containers, office furniture, photocopiers and other types of assets. The volume, velocity and variety of leasing data changes will present an administrative challenge for many large companies. How will establish processes for tracking new leases to ensure that your accounting is kept current with the most accurate, complete and up-to-date information?
1) New Leases
Your company probably signs hundreds, if not thousands, of new leases each year. And each of these need to be properly accounted for. What strategies will you use for tracking new leases being signed by various business units across the world?
2) Embedded Leases
In addition to traditional leases, your company signs hundreds of new service contracts and outsourcing agreements each year. Some of these may contain embedded leases. How will you gain visibility into these new contracts?
Although, less common sale-leaseback transactions can have important accounting implications both in terms of revenue recognition and lease accounting. What processes will you use to track these complex, specialized transactions.
4) New Subleases
Although they are relatively few in number, subleases can have important lease accounting implications. When you sublease part or all of a real estate lease then you have effectively become a lessor for accounting purposes. How will you gain visibility into new subleases being signed for properties around the world?
Keeping your lease accounting accurate is not limited to just tracking new leases. There are changes that impact your accounting that occur during the middle and at end of term as well.