With an over 100-year history of caring for families and healthcare professionals, this consumer packaged goods company continues to innovate for customers around the world. But to lead in the market, make strategic decisions, and navigate changing regulations, it must also be at the forefront of regulatory compliance.
Though new lease accounting standards were announced in 2016, the company had already committed to change years in advance of the announcement. As a large, decentralized organization with hundreds of individual reporting units, it needed a comprehensive solution to centralize data and maintain financial credibility. Compliance was critical for this company with operations in over 60 countries.
As an innovator, the company embraced the KPMG Leasing Tool (KLT) and is ready to adopt the new standards on time by:
Creating iconic products for families and healthcare professionals for over a century, this global company turned its attention to rethinking the balance sheet. It took a proactive approach to lease accounting practices well before the Financial Accounting Standards Board and the International Accounting Standards Board proposed the new leasing standards.
Company leaders teamed up with KPMG to leverage the KPMG Leasing Tool (KLT) and bring the new standards to life. A first-of-its-kind application, KLT brought together technical accounting, governance, project management, and data intelligence.
The company's finanical personnel began collecting data and analyzing their policies and procedures, leading to a better understanding of their lease portfolio. They looked at factors such as leasing by class of underlying assets and the number of worldwide vendors. By evaluating this data in KLT, they could make better decisions, reduce their number of vendors, and increase cost savings.
As KLT took shape, KPMG worked closely with the client to further tailor the solution and establish a training program. They then began to enter leases into the system. With each lease added, KLT became more customized and evolved over time. A trusted advisor every step of the way, KPMG continues to assist with insights and analysis. With KLT and the training needed to master the new standards, this company can ensure the best operations for the continued health and wellness of its customers.
When standards are set to change, it’s important to proactively prepare for the future. New standards require different things: greater amounts of data and previously unheard-of requirements. By preparing well ahead of an issued mandate, organizations can work through challenges thoroughly and better ensure success by the adoption date.
As accounting standards change, so do the processes and policies used to comply with them. Commitment to advancement in accounting goes together with advancing technology, but tech is only one part of it. Having a team in place that has the right technical know-how and insights helps ensure the technology succeeds.
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