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Lease Accelerator Publishes Whitepaper on Lease Accounting Changes for Lessees

May 14, 2013, 07:00 AM
Filed Under: Industry News

LeaseAccelerator announced that it has published a new lease accounting whitepaper for lessees that explains the new 2013 FASB Exposure Draft, which the FASB is expected to release later this week.  The official title is "How to Prepare Now for the Coming Lease Accounting Changes."

"This edition covers many of the financial, tax, and operational impacts of the new standard on equipment and real-estate leases and explains how to prepare and manage them. It serves as a step-by-step pathway for lessees from current GAAP to the new FASB/IASB accounting standard," stated Michael Keeler , LeaseAccelerator's CEO and The Lessee Advocate's publisher. "Lessees will need 6-18 months to implement processes and systems to comply with the new standard. But it's not all about compliance. Lessees can also capture significant savings by adopting the best practices described in the whitepaper and generate a positive ROI for the transition project."

"This second edition reflects the contents of the May 2013 FASB exposure draft. It also includes feedback from many readers about how to make the document more useful to controllers, accountants, treasurers, procurement, and other executives responsible for lease portfolios."

Keeler explains, "The whitepaper describes how to create and maintain a database of documents and data in order to ensure completeness, accuracy, and auditability of your data on a sustainable basis. We added a new section to explain how lessees can apply asset-based lease accounting and portfolio management software to simplify the process and enable all stakeholders to contribute to accurate and timely financial reporting."

Bruce Conway , VP of Operations at LeaseAccelerator, a lease accounting specialist and whitepaper contributor, states, "Most leases will soon be capitalized, and applying the new FASB standard to equipment leases will be administratively more complex and nuanced than real-estate leases. As a result, lessees must be able to perform accounting at the asset level. For example, if there is a clear economic inventive to renew asset(s), the renewal term must be included as part of the accounting amortization term, which means that the accounting term may differ from the contractual lease term on an asset-by-asset basis within the same lease. For this reason, the whitepaper focuses on equipment leasing examples."

Conway explains, "The whitepaper presents a comprehensive 9-step plan for implementing a transition project and improving the financial performance and visibility of your lease portfolio in the process. Lessees can take immediate action with this document. If you have not done anything to prepare, this will help you get started. If it is already a work-in-process, it will help you sharpen your strategy and tactics."

"We learned from our Year 2000 and SOX compliance experiences that a well-informed implementation plan reduces fear, risk, and cost. Changes like this don't have to be scary," Keeler assures.

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