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Accounting

LeasePoint Solution Focuses on New FASB Lease Accounting Standards

The new FASB and IASB standards require companies to record operating leases on the balance sheet which was previously not required. The move will take effect in calendar year January 2019 for publically traded companies and will require comparative ...

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Deloitte and IBM have created a new solution that addresses the new FASB lease accounting standards.

Powered by IBM’s Watson Internet of Things (IoT) and real estate management software, IBM TRIRIGA, Deloitte’s “LeasePoint is designed to aid companies in streamlining their workloads, which is an important step towards compliance with new lease accounting changes,” said Jean Chick, principal, Deloitte Consulting LLP. “As an organization with deep accounting and real estate experience, Deloitte is well-positioned to address these technical accounting, procedural and systems complexities through the strength of IBM’s TRIRIGA platform.”

The new FASB and IASB standards require companies to record operating leases on the balance sheet which was previously not required. The move will take effect in calendar year January 2019 for publically traded companies and will require comparative financial information which may require system and processes to be in place in 2017.

Companies must therefore act quickly to address these standards, which could have a potential $2 trillion cumulative impact on the balance sheets of companies holding leases, according to a widely circulated 2011 IHS Global Insight study for the Equipment Leasing & Finance Foundation.

The newly released lease accounting standards are intended to provide investors, lenders and others a more accurate picture of the financial condition of the companies to which they provide capital. Managing significant changes to balance sheet accounting requires a feature-rich, flexible and global solution for automating the accounting process for a wide variety of lease types.

To address these changes, Deloitte has designed and is developing a lease accounting technology solution powered by IBM’s leading Watson IoT software TRIRIGA. LeasePoint is designed to provide clients with the tools necessary to address the new regulations, sustain compliance and better manage lease portfolios using cognitive insights and analytics. It will be available in a cloud-hosted environment and is anticipated to give clients an advantage by quickly assessing the impact of various leasing scenarios.

“IBM developed its facilities management offering to help organizations increase their operational, financial and environmental performance over time,” said Chris O’Connor, general manager, Offerings, IBM Watson Internet of Things. “Clients can also use IBM cognitive analytics to provide actionable insights for improving lease accounting policies and to anticipate issues with managing a diverse portfolio of leases.”

The combined strength of Deloitte’s experience performing installations of TRIRIGA software and vast experience in accounting and real estate services, coupled with IBM TRIRIGA software for managing real estate and facilities, is expected to provide companies with a modern and efficient way to manage large portfolios of leases.

Deloitte Products & Solutions is an innovative organization with dedicated resources and capabilities within Deloitte Consulting LLP that focuses on developing IP-based assets. The products and solutions organization drives development across a variety of asset types and currently has more than 110 products and solutions actively sold in the market.