Unintended Consequences of Lease Accounting Changes

Unintended Consequences of Lease Accounting Changes


April 2011

Unintended Consequences of Lease Accounting Changes Todd Anderson, Senior Managing Director, CB Richard Ellis IASB and its international counterpart FASB's proposed changes have been discussed ad infinitum by the many organisations concerned about corporate real estate's impact on financial statements. However, are we truly prepared for what's next--the possibility of an implementation nightmare that reaches the size of Y2K and SOX combined? The proposed changes will create considerable risk to financial statement reporting, requiring subjective judgments coupled with more finite reporting. Performance measure will be re-evaluated, debt covenants scrutinized and even individual bonuses may have to be recalculated. At the same time, it creates immeasurable opportunity to finally create truly integrated financial/lease accounting reporting systems and bring together shared service resources more strategically. Key Take-aways: * Gain critical insight on three proposed accounting change inconsistencies * Learn the state of system preparation and implementation * Understand the needs and motives of internal corporate collaboration resources (finance/accounting, HR, IT) * Determine effective techniques for strategic engagement of more holistic shared service integration * Create corporate strategy and positive career development opportunities in the process

Keywords: Middle East Chapter, FAS 13, IAS 17, Lease Accounting Changes, CBRE, Lease, Financials

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