Getting Ahead of New Lease Liability Standards
New accounting policies implemented in lease asset standards may seem daunting, but proper planning and early application can lead to an easy transition for fleet management moving forward. Reassuringly, Paul Azores, ARI vice president of finance, stresses to Pro Contractor Rentals that while these new standards will change the accounting principles behind leasing, as a whole, leasing remains a worthwhile advantage for companies focused on cost savings.
The International Accounting Standards Board (IASB) and Financial Standards Accounting Board (FASB) have rolled out a new policy effective Jan. 1, 2019 for all companies, requiring all businesses to calculate a new Right of Use Asset alongside the Lease Liability for all products. This change in process came into effect for public companies in Dec. 2018, and all companies are now required to begin a roll-out period in preparation of the Jan. 2019 deadline.
The IASB and FASB are aiming to improve transparency in lease accounting measures. Learn more about the policies and changes around these new lease asset standards from Holman EVP and CFO Gernot Leinenbach.