Beyond the Balance Sheet:

Smarter Compliance with new

IASB and FASB lease accounting rules

Current challenges and opportunities presented by the lease accounting standards

Top findings from a global study of 179 senior finance and real estate executives

In this presentation:

The new lease accounting

standards will add more than

USD 1 billion

in liabilitiesto balance sheets of large

public companies in Europe,

the U.S., and many other

countries.

More than half of companies

expect Debt/Equity Ratio and Return on Assets to

worsen.

Pending changes to global lease accounting rules will create a negative effect on critical financial performance ratios

92 percent of executives consider their companies not prepared.

Many companies expect implementation to include more than 1,000 leases.

Nearly two-thirds of senior executives expect new IT systems to comply with the new lease accounting standard.

IBM-funded survey of senior finance and real estate executives highlights challenges created by new lease accounting rules

WHO SHOULD CARE?

IT

Executives

Real Estate

Executives

Finance

Executives

Because …

… facilities portfolios

will require increased

efficiency to minimize

balance sheet impact

Because …

… finance, real estate

and other functions will

require new or

upgraded IT systems

Because …

… new accounting

rules increase the

complexity of financial

forecasting

Anyone who is foolish enough to think they can

do this on a spreadsheet is only a few quarters

away from having a big problem.John Merino,

Chief Accounting Officer, FedEx

How IBM TRIRIGA helps …

Identifies under-performing and

under-utilized facilities Metrics highlight red, yellow or green

status of performance against targets

Models alternative planning

scenariosAdd or remove facilities to increase or

decrease space use within trial plans

Compares financial and non-

financial returnsShows side-by-side comparison of

financial and operational impacts of

proposed lease vs. buy decisions

… generate higher

return on leased

assets

Alerts to required lease accounting

reviewsGenerates required lease accounting

reviews on a company-defined basis

Automates lease accounting controlsGenerates amortization schedules and

financial analysis upon approvals

Audits decisions, approvals and

processesCaptures user actions and approvals with

before and after data values changed

… simplify

compliance with the

new rules

Pre-built data structures and

processes for all lease typesDelivers real estate and equipment lease

types “as-shipped”

Third-party lease abstract supportDelivers pre-built spreadsheets and data

exchange to accelerate lease data

capture

Integrates with financial and other

critical business systemsStreamlines data exchange between

lease accounting , Point of Sale and

financial accounting systems

… accelerate

preparedness with

new rules

Download the complete study:

ibm.co/1dI7a77

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