Considering the impact of the proposed new lease accounting guidance on lessees in the Automotive Industry
The FASB and the IASB are moving forward with a lease accounting overhaul that will bring substantially all leases onto the balance sheet and change income statement recognition. Companies should begin now to prepare, in a measured way, for the upcoming necessary business process changes.
The report above discusses the following:
- Background and high level overview of the proposed standard
- Questions, their analysis and process – impacts that companies should be considering now:
- Step 1 - Do I have a lease?
- Step 2 - How do I initially measure the lease?
- Step 3 - How do I model the expense?
- Step 4 - How do I identify and unbundle lease components?
- Step 5 - What are the ongoing requirements?
- Detailed illustrative auto industry examples that highlight key issues that companies may need to consider, such as determining whether or not your arrangement contains a lease
- Next steps and Q&A discussing matters that may be of specific interest
The report “Lease accounting: Transformational Change – Considering the impact of the proposed new lease accounting guidance on lessees in the Automotive Industry” is only an introduction of our insights and observations. We can help you with the proposed lease accounting standard, and what impacts you can expect as a result of the proposed new standard. PwC can work with your organization to explore:
- Process for transition to this new guidance
- Process to track and administer your leases
- How and when to start a program to manage change and meet compliance
- What other departments may be impacted by the new guidance