New Accounting Standards for Lease Assets Coming in 2018
According to the IASB and the FASB, companies that lease or expect to lease fleet vehicles will need to adopt new accounting standards related to lease assets as early as December 15, 2018. With the intention to offer greater transparency, the new standards change how lease assets are accounted for and presented on the balance sheet. ARI Vice President of Finance Paul Azores advises you to start preparing for these changes now.
He tells why in the latest issue of American Infrastructure: “This accounting change may result in signification investments of time and resources to ensure that companies are ready to implement the requirements under this standard.”
Despite the new standards, Paul says leasing remains a viable option because of its ability to improve cash flow and reduce costs by bringing newer, warrantied vehicles and equipment into operation. He explains how NJ Transit experienced a 10 percent reduction in maintenance costs year-over-year just by leasing 10 percent of its fleet.
Want to learn more? ARI Senior Vice President Gernot Leinenbach has published a table in his blog that shows how financial performance ratios and measures could be impacted. If you have any questions about the coming changes or would like to speak to a fleet leasing specialist, please contact ARI (firstname.lastname@example.org).