NEW YORK--(BUSINESS WIRE)--Trillions of dollars of lease obligations are set to hit corporate balance sheets in December 2018 for US companies, and January 2019 for international companies as new lease accounting standards (ASC 842 and IFRS 16) take effect. The two standards introduce new rules for how companies identify and measure the value of leases, and how they report them on corporate balance sheets. But as the deadlines for compliance loom, companies will need to look beyond leases - to their entire contract portfolio - in order to meet the requirements, according to new insights from Axiom, the leading global alternative legal services provider.
"One of the critical areas of the new lease accounting standards is not just abstracting 'traditional leases' like real estate, but it is understanding what is now considered a ‘lease’," said Mathew Keshav Lewis, SVP of Regulatory Response Solutions at Axiom. "The new standards have expanded that definition substantially, to include a much broader set of commercial arrangements. As a result, organizations will need to identify and understand the data that is held in, potentially, thousands of contracts across a variety of different uses – manufacturing equipment, servers etc. – to ensure they are accurately reporting on all of the lease elements."
To help organizations comply with the new standards, Axiom today announced the launch of its Contracts Intelligence Platform for Lease Accounting, a multi-purpose technology-enabled solution designed to:
- Uncover embedded leases hidden in other contract types;
- Ensure those leases are categorized properly, and;
- Provide business-critical information required to understand the nature of the embedded lease and its balance sheet impact.
Few accounting/legal departments have the type of visibility into their contract portfolio needed to locate and review thousands of embedded leases - frequently stored in disparate locations - to meet the standards’ near-term deadlines. Axiom’s Contracts Intelligence Platform for Lease Accounting simplifies this process by combining artificial intelligence-driven analysis with powerful business intelligence capabilities and experienced legal professionals to quickly surface contract data needed to identify embedded leases in one user-friendly dashboard. This approach enables clients to understand, at scale, their embedded lease exposure across all potentially in-scope contract types.
Axiom has deep experience working with the world’s leading companies on contract review and remediation, handling over a million contracts and ten million contact data points, per year. The Contracts Intelligence Platform for Lease Accounting is the latest addition to a growing portfolio of technology-enabled regulatory response offerings from Axiom, which includes BrexitBridge, a standardized, flexible solution to update contracts ahead of Brexit and its GDPR contracts compliance solution.
Axiom, a recognized leader in the business of law, provides tech-enabled legal, contracts, and compliance solutions for large enterprises. Axiom’s solutions combine legal experience, technology, and data analytics to deliver work in a way that dramatically reduces risk, cost and cycle-time. The firm comprises 2,000-plus lawyers, professionals, process engineers and technologists who serve over half the Fortune 100 across 15 regions and 3 centers of excellence globally. www.axiomlaw.com