Benefits Beyond Compliance: IFRS 16/ASC 842 and the Opportunities of Better Lease Management
In 2016, The International Accounting Standards Board (IASB) and The Financial Accounting Standards Board (FASB) announced the IFRS16 and US GAAP ASC 842 standards. To comply with these regulations, all large public and private corporations were required to re-evaluate their real estate and asset liabilities, which meant a total of $2.8 trillion in assets had to be reviewed prior to the January 1, 2019 enactment deadline.
During the transition to IFRS16 and US GAAP ASC 842, corporations around the world had to move quickly to get into compliance. With many still reliant on manual, spreadsheet-based processes, significant resource investments were required. Internal teams spent scores of hours just identifying the total population of relevant leases. And the challenges didn’t end there.
In this paper, we will explore the challenges of compliance for retailers, a sector that was particularly impacted by the new standards through real world examples. We also explore how the transition became a catalyst for better lease management for the long term, ultimately mitigating the impact of the changing retail landscape.
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