Part Two of a Three-Part Series
This series of articles focuses on some of the expected challenges and impacts of the new lease-accounting standard and early planning steps that may reduceimplementation costs. Part One (in the January/February issue) looked at lessors’ internal considerations (operations, staffing, accounting policies, education,underwriting and evidence to support key estimates in inputs). Part Two expands the discussion to identify factors to consider for accounting and servicing systems’impact from the change. Part Three will focus on customers’ (lessees’) new requirements and needs. Please note: The effective date of the standard is the reportingperiod following December 15, 2018 for U.S. public companies. Prior year comparative data are required: balance sheet year-end 2018 and income statements fullyear 2017 and 2018.
The first article in this series discussed the importance of understanding the new accounting rules across the business in order that the fullimpact of change is understood. Having those discussions in group settings will help foster agreement and commitment to the changesnecessary to implement the new standard. Consider whether there are other system applications that also need modification such as aseparate front-end system or pricing tool. You should also consult with your software provider(s) to understand what version the upgrademodification will be applied to and whether that is compatible with your version in use. If you are operating on an older version, yourupgrade path may be more complicated.