Lease Accounting Standard Change Impact

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Lease Accounting Standard Change Impact

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NexInfo "Lease Accounting Standard Change Impact" provides insights into the recent lease accounting changes and their implications for businesses. We help organizations navigate these updates, ensuring compliance, optimizing financial reporting, and minimizing disruptions, ultimately improving transparency and accuracy in lease management. Learn more at - – PowerPoint PPT presentation

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Title: Lease Accounting Standard Change Impact

1
How to Achieve Compliance with New Accounting
Standard - ASC 842

June 28, 2018

Prepared by Hemal Parikh _at_ NexinfoSolution
2
Company Information

NEXINFO SUMMARY
Consulting company focused on helping clients
achieve Operational Excellence via an optimal
blend of Business Process Software consulting
services
Deep domain expertise, including Integrated
Business Planning, Sales Operations Planning,
Enterprise Resource Planning (ERP), Product
Lifecycle Management, Predictive Data Analytics,
Security Compliance, and Business
Transformations
Founded in 1999 and managed by computer industry
business process professionals
Clients include emerging companies and Fortune
1000 corporations
Recognized in the industry, including features in
Gartner Reports, The Silicon Review (50 Smartest
Companies of the Year 2016 and 10 Fastest Growing
Oracle Solution Providers 2017), and CIO Review
(100 Most Promising Oracle Solution Providers
2015)
CLIENTS
CORPORATE INFO
HQ in Orange County, CA with offices in Redmond,
WA, Chicago, IL, Bridgewater, NJ, Dublin,
Ireland, Chennai Bangalore, India
Operations across the United States, Europe
(Ireland, UK, Switzerland, Belgium) India

3
Presenter Information

Name Hemal Parikh
Experience
Solutions Architect with 14 years of experience
in delivering financial solutions across
industries geographies.
Oracle Certified Implementation Specialist with
experience in leading ERP transformation
engagements, recommending industry best practices
implementing Business Optimization initiatives
for Enterprise Customers across industry domain.

4
Agenda

Introduction
Financial Accounting - Change Impact
Sample Use Case
Financial Compliance Road Ahead
System View Lease Accounting
Implementation Challenges

5
Submit questions via chatReadiness Checklist
Reminders
6
Bracing the Impact
Survey of 100 US Companies with highest dollar
value of lease obligation
7
Quick Glance on Change

What is the Change?
Current GAAP, requires only capital leases to be
recognized on the balance sheet.
Change The new Accounting Standard Code (ASC
842) requires both Finance Operating leases to
be recognized on the balance sheet for Rights
Obligations.
Reference https//www.fasb.org/jsp/FASB/Page/Imag
eBridgePagecid1176169253354
Who is impacted?
Affects all organizations small or large that
lease Assets such as Real Estate, Vehicles
Construction Equipment etc.
When is the change effective?
It is effective for public business entities for
fiscal year beginning after Dec 15, 2018. And for
all other organizations ASU is effective year
after i.e. Dec 15, 2019.
How to address the Change?
Organizations need to start accounting for
Operating Leases on their balance sheet as assets
and liabilities, which use to be off the Balance
Sheet before.
Impacting organizations financial reporting.

8
Change to Accounting Financial Reporting Impact
9
Sample Use Case
Source PWC
10
Financial Compliance Road Ahead
11
Financial Compliance - Road Ahead
Full of Twists Turns
12
Leverage System Features Lease Accounting

Digitizing Lease Details captured centrally in
system.
Supports centralized decentralized operation of
Leases.
Ease of Tracking Monitoring your Leased Assets
Single Source of truth for you Accounting.
Financial Reporting Compliance
Automatically Schedule your Lease Payments
Lease Renewals Retirement
Automate accounting of your Asset, Liability
Expenses aligned to amortization schedule.

13
Lease Accounting Process Flow (Lessee)
Establish Lease Contract
Create Lease Asset
Lease Asset Accounting (Amortization)
Schedule Lease Payments
Financial Reporting Trial Balance / Income
Statement
14
System Snapshot Oracle Cloud ERP
15
System Snapshot Oracle Cloud ERP
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System Snapshot Oracle Cloud ERP
Right of Use - Asset
Lease Liability A/c
17
System Snapshot of Usage Oracle EBS

Report Financial Results using
Liability Balance with Payment/Interest Accrual
ROU Asset Balance
Generate Report using BI Publisher
Portfolio Summary Report
Portfolio Detail Report
Lease Detail Report

18
System Snapshot Oracle PeopleSoft
19
System Snapshot Oracle PeopleSoft
20
System Snapshot Oracle JD Edwards
21
Key Implementation Challenges

DATA - Unstructured disperse data
Decentralized Lease Operations
Centralized Lease Operations, but data spread
across spreadsheets, Hard copy paper agreements,
Scanned pdf files.
PROCESS Manual in-efficient process to track
Leases. Requires streamlining of Lease Tracking
Reporting business process.
SYSTEM No standard system to capture, track
account for Leased Assets. Need to select the
System which seamlessly integrates with our
ecosystem.
DEPLOY How to implement the ideal combination
of System, process data collation within the
regulatory timeline.

22
How can we help you ?

We can help to Fast Track your leasing
transformation
Business Process Advisory
Financial Accounting Expertise
Technology Data Expertise
Robust Fast Track methodology using
Diagnostic Workshop to capture inputs
Impact Analysis Findings
Analysis Workshops for deep dive 4-6 Week
Implementation Plan
Our Differentiators?
Breadth of experience in implementing Financial
Accounting Applications for enterprise customers
across multiple Industries
Technical expertise across multiple Product lines
Oracle Cloud, EBS, PeopleSoft, JDE, SAP, etc.
Standardized process template-based approach to
expedite data collection upload of your lease
data into target Accounting System.