How can we support your lease accounting approach?
New lease accounting standards under both International Financial Reporting Standards (IFRS) and US GAAP become effective on or after 1 January 2019. The definition of a lease, the recognition and measurement, and the disclosure requirements for leases will change under the new standards. Organizations should start preparing for this transition as soon as possible, to assess how their lease agreements will be reported in the future.
Implementing the lease accounting standards will likely require significant resources that have the appropriate skills to undertake the manual exercise of identifying affected leases and then understand the accounting implications of the new standards.
EY has created a suite of tools to help organizations identify and organize their lease data to assist in assessing the impact of the new standards. The lease accounting tool suite can help organizations understand the outcomes, compliance requirements, costs and risks associated with adopting the new standards. Our tools can help collect, sort and analyze lease data to help prepare for this accounting change.
How can artificial intelligence enhance your lease accounting approach?
EY Lease Reviewer leverages artificial intelligence (AI) or machine learning to complement our suite of technologies for lease accounting. The tool can help improve the efficiency and accuracy in assessing large number of lease contracts.
EY Lease Reviewer has been developed by our Global AI Lab and Financial Accounting Advisory Services (FAAS) teams to:
- Help manage very large number of contracts (it is not rare for large multinational corporations to manage 100,000 to 200,000 lease contracts that are more than 500 pages long)
- Reduce manual review and data extraction time to free up teams to assist in particularly complex areas
EY Lease Reviewer acts as a smart assistant, helping our teams to identify and extract information such as the lease commencement date, payment amounts, renewal and termination options that are required for transitioning to the new standards for future lease accounting.
It uses AI to convert unstructured lease contracts into structured data to help the transition using supervised learning methods. This means that the models in the systems are “trained” on a set of examples created by our teams.
For more information about EY Lease Reviewer, please contact us.
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