June 20, 2017 | Written by: Dave Dilworth
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Are you getting ready to address the implications of the new lease accounting changes with TRIRIGA? Although FASB’s ASC 842 and IASB’s IFRS 16 will take effect in 2019, many organizations are only now beginning to realize the amount of effort required to meet the new standards.
According to a recent article in the National Real Estate Investor, organizations may face significant ‘heavy lifting’ in order to prepare for the new standards. Sean Torr, Deloitte Advisory managing director at Deloitte & Touche LLP sums up the challenge:
‘Lease accounting changes will have the biggest impact on companies that have a large volume of leases and/or very complex leases. Many public companies that do have a bigger load of lease obligations have started the process and are realizing that there is a significant amount of “heavy lifting” that needs to occur over the next 12 to 18 months.’
What are the biggest challenge areas?
The biggest changes to businesses will be the new Right of Use (ROU) Assets and Lease liabilities that will hit balance sheets, as well as the intensely manual approaches and effort that many see before them. How many organizations are leveraging Integrated Workplace Management Systems (IWMS) to manage their real-estate holdings and automate these manual efforts?
New release of TRIRIGA helps reduce the effort required to meet new standards
In order to help organizations comply with the new standards, and understand the implications of these changes, IBM TRIRIGA continues to deliver a single integrated workplace management system with new enhancements planned in the next release. TRIRIGA supports the complete lifecycle of facilities management and will automate compliance activities to address changes that affect multiple teams and roles.
Here’s how TRIRIGA can help:
CFO and CAO:
- The planned release of IBM TRIRIGA 10.5.3 will provide a sub-ledger system for real estate and asset lease accounting that is able to generate journal entries out-of-the-box for ASC 840 and ASC 842 under US-GAAP as well as for IAS 17 and IFRS 16. It also covers period closings and report generation for the most common reports required under the new standards.
Real Estate and Fixed Asset Managers:
- The planned release of IBM TRIRIGA 10.5.3 separates the duties of a lease administrator and a lease accountant, allowing the lease administrator to enter contractual information, and then enabling the lease accountant to run classification tests, reassess lease decisions, and report on the ROU Asset and Lease Liability.
Facility Management, and Occupants:
- There are also new capabilities to improve day to day and occupancy experience. They can leverage a new Workplace Services offering that engages every-day employees through new mobile web apps that provide access to services managed by IBM TRIRIGA, anywhere, and on any device. This includes: a new Service Request app to submit work requests, a new Reservation app to quickly create reservations for individual workspaces or multi-attendee meeting rooms, and a new location-aware Workplace Services Portal to provide a single, unified access point for launching the apps and tracking status of requests.
To learn more about how IBM TRIRIGA can help you address the upcoming changes to lease accounting rules, check out check out these resources.
Explore the power of an IWMS solution for managing your real estate portfolio across the lifecycle. Watch the new on-demand webinar to discover in-depth about how an IWMS solution can help you tackle lease accounting changes.