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TRIRIGA: Proposed major lease accounting changes must be addressed at the portfolio level March 30, 2010

Posted by Bob Cook in Financial Planning & Analysis, Lease Accounting.
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1 comment so far

Tririga has a another posting about the impact of new lease accounting on corporate real estate.  See:   TRIRIGA Insights | Knowledge to shape your real estate and environmental strategies.   I think, though, the lease administration system vendors have quite a bit of work to do to augment their offering to support the processes that are going to be needed once the new standards are in place. 

Tririga and most other such integrated workplace management systems (IWMS) had their roots serving facility managers.  They’ve been good at addressing things such as tracking office assignments, managing work orders, making calculations for chargebacks, and facilitating budgeting.   I have a question in my mind, th0ough, as to whether these IWMS can be modified easily to provide the data that will be needed for the new accounting.  For example, rent obligations will need to be projected for each lease, including for renewal periods that are likely.   As far as I know, IWMS do not have this capability. 

There’s a lot of work that needs to be done by IWMS vendors to either augment their software or provide easy interfaces into accounting system or to other systems that may be developed specifically to address the challenges of the new lease accounting.

There is really a lot to be done by the industry — software vendors, IT integrators, accountants, real estate consultants, and corporate real estate departments — to get ready for these new standards.

While Tririga’s post is right on target in pointing out the need for a portfolio view to address the new lease accounting, I would like to see it post about what it is doing to prepare its software …. although, I suppose they might be holding their cards close to their vests, so as to not clue in their competition.

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