If you’re involved in any form of leasing, you are undoubtedly aware that there’s a huge change underfoot in how leases are accounted for, both by the lessor and the lessee.
On Jan 13, 2016, the International Accounting Standards Board (IASB) issued the long-awaited lease accounting standard that it has been developing for over a decade with the Financial Accounting Standards Board (FASB), which is also expected to release its version of the standard for all U.S. businesses in early 2016.
Our goal here isn’t to explain it all. There are lots of helpful publications that go into great detail, and we’ve included a few of our favorites at the end of this post. But we do want you to think about how you will comply, what changes need to be implemented, and whether you have all the necessary information about your leases to meet these more complex reporting standards.
There are about 50 required lease attributes, and here at Brightleaf, we’ve identified 29 that are seldom captured by the many of the lease management software applications. Some examples:
Date of the First Periodic Review, frequency and the next review date
Current or Previous FASB-13 Deferred Rent Balance
Current Price Index Spot Rate
Price Index Adjustments
Residual Value Penalty
Term Option Penalties
Discount Rate Source
But Brightleaf can help! Our automated abstraction service uses sophisticated semantic intelligence software and human quality control to mine all the data from hundreds or thousands of leases to get you the data you need to comply. Reach out to us if you’d like to learn more: firstname.lastname@example.org
You can read the IASB announcement right from the source:
Here’s some commentary on the announcement
Download this report: It’s finally here – IASB publishes new standard on lease accounting!
Preparing for the Proposed New FASB Lease Accounting Standards