CoStar’s Data Connector and Lease Accounting Software enabled this global organization's accounting teams to retain investments in legacy lease management systems, avoid expensive upgrades and rapidly implement ASC 842 and IFRS 16 compliance solutions.
This Fortune 25, multinational conglomerate has more than $110 billion in annual revenue and numerous business operations from aviation and electronics to energy and transportation. The 125 year old company operates multiple diverse business units worldwide with more than a dozen separate ERP systems.
With more than 2,800 real estate locations and $4 billion in lease obligations, compliance with the new FASB and IASB lease accounting standards represented a significant challenge and expense for the company’s accounting and finance team. The company had previously centralized its real estate management process across all 10 operating divisions, but lease accounting under ASC 840 – including rent and operating expense payments – was still managed in a distributed manner. The company also had a substantial, multi-year investment in an on-premise IWMS system for lease management. Required upgrades and additional cost to make legacy systems functional for ASC 842 and IFRS 16 reporting requirements would be very expensive and complex due to high levels of customization to suit different business unit needs. These combined challenges created a high risk of not meeting the project and compliance deadlines.
CoStar’s cloud-based lease accounting software and proprietary data connector solution offered the company a way to retain its investment in existing lease systems – while avoiding the expensive upgrades proposed by the vendor – and take advantage of CoStar’s proven management and reporting functionality. CoStar created a six week pilot system that allowed the company to test and review system integrations, workflows, and lease accounting calculations and reporting. Once the system’s capabilities were validated, CoStar’s implementation team kicked off the system roll-out to all the company’s business units. CoStar also trained more than 20 worldwide accounting leaders on how to get the most value and use from the solution. The combination of CoStar’s professional services, easily configured SaaS lease accounting software, and enterprise security made for a rapidly deployed, economical and low risk solution.
The company’s accounting and finance team was able to wrap its arms around the tremendous amount of lease information and begin to more effectively manage and report on the data. In addition, they were able to establish efficiency gains and better controls. Because the solution is cloud-based with an unlimited amount of users for the same cost, the company plans to offer access to more than 2,000 users.