A deadline is looming for companies to comply with new Lease Accounting Standards. The changes introduced by the Financial Accounting Standards Board will require companies to account for most operating leases on their balance sheets as early as January 1, 2019.
The new rules will have a significant impact on any business that has commercial leases. Yet, findings from a KPMG survey suggest that companies are vastly underprepared. Of the companies surveyed, 92 percent say they will need to implement a new IT system but 81 percent say they haven't started.
Businesses are running out of time, but KPMG (No. 16 on the DiversityInc Top 50 Companies list) has created an innovative solution. The KPMG Leasing Tool for IBM TRIRIGA (KPMG Leasing Tool) helps organizations efficiently prepare for and adopt a longstanding system to comply with the new leases standards.
The KPMG Leasing Tool embeds KPMG's intellectual property into a cloud-based digital platform to help organizations account for their lease transactions and deliver financial reporting to accounting stakeholders. The tool also facilitates business intelligence, enabling users to perform data and analytics analyses on their lease portfolios to potentially unlock cost savings.
"To effectively comply with the upcoming leasing standard's requirements, companies must act now to properly account for their leases and prepare to report several years of data, which takes extensive planning. The KPMG Leasing Tool is the answer to that," said KPMG's New Lease Standard Implementation Lead Partner Dean Bell.
"In addition, our professionals are deeply knowledgeable and experienced in not only uncovering how accounting and financial reporting policies will be impacted but also how processes, internal controls, contracting, and systems will need to change to comply with the new rules."
To learn more about the KPMG Leasing Tool, visit: https://advisory.kpmg.us/deal-advisory/lease-accounting.html.
"Our clients' main challenge is to comply with the new regulations with quality, speed, scale, and persistence. The optimal way for KPMG to help them solve this challenge is to embed the firm's lease accounting expertise into the very fabric of their businesses," said Larry Raff, Head of KPMG Spectrum.
"That is the purpose of KPMG Spectrum and our intelligence engines, which digitally expand KPMG's ability to deliver valuable outcomes to our clients. When it comes to lease accounting, the KPMG Spectrum Leasing Tool is the clear choice."
Through KPMG's alliance with IBM (No. 20), the KPMG Leasing Tool is powered by IBM Watson Internet of Things technologies and built on IBM's well-known lease administration platform, IBM TRIRIGA. The KPMG Leasing Tool has already been adopted by Fortune 500 companies, including Johnson & Johnson (No. 8).
"Preparing to adopt the new leases standard was a concern to Johnson & Johnson given our global footprint, very decentralized organization structure, and substantial lease portfolio," said Judy Ryan, Financial Compliance & Procedures senior manager at Johnson & Johnson. "The KPMG Leasing Tool gave us a simple approach to dealing with a very large, complex project so we can comply with the new standards. While compliance was the primary driver in undertaking this project with KPMG, we found that we were able to unlock unexpected savings by analyzing components of our leasing portfolio."
About KPMG Spectrum
KPMG Spectrum offers intelligence engines that embed the firm's advanced technologies, global scope, and intellectual property in nimble new offerings unique to the marketplace. Intelligence engines combine human expertise with the power of technology to deliver action through intelligence, resulting in informed strategic execution in the face of complex business challenges.