To help organizations comply with the new lease accounting standards, Axiom announced the launch of its Contracts Intelligence Platform for Lease Accounting.

Trillions of dollars of lease obligations are set to hit corporate balance sheets in December 2018 for U.S. 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 -  to meet the requirements, according to new insights from Axiom.

"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, Senior Vice President 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."

Its new multi-purpose technology-enabled solution is 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.

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.