The proposed Financial Accounting Standards Board (FASB) and International Account Standards Board (IASB) lease accounting changes are likely to take effect sometime in 2017, and this has some finance executives thinking. Many are concerned about the impacts of moving operating leases onto their balance sheets, but, according to a CFO Research study, sponsored by IBM, most large companies indicate that they are not ready yet to deal with the change.
The boards, and very few survey respondents, say the lease accounting change will provide more financial transparency, but more respondents think there will not be a positive change on anything except EBITDA. Asset leasing and real estate are central components of many companies’ financing strategies: they are used to optimize cash flow, maximize liquidity, reduce costs, and improve ROI. So this would lead an observer to think that CFOs and their teams are starting to prepare.
Yet of the 179 finance executives surveyed from companies with at least $1 billion in annual revenues, fewer than 10% said they were adequately prepared to deal with the change.
Finance chiefs say the proposed rule will effect far-reaching changes at their organizations. From training staff to altering processes to buying new technology, finance organizations should start thinking—now—about what they need to do, before the FASB/IASB rule takes effect.
During this Webcast presentation, David Owens, Editorial Director at CFO Research, and IBM will review survey findings and share with attendees:
- What, exactly, the proposed change means;
- What impact it will have on organizations;
- How to get a handle on the situation—identifying the key assets and processes affected; and
- What steps your organization should take to prepare.