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Nakisa Lease Administration streamlines lease accounting for organizations
in the retail industry.

Lease contracts touch almost every aspect of a retail business. Retailers use these arrangements to make cost-effective investments in their stores, point-of-sale systems, distribution centers, and transportation equipment. The new lease accounting standards – IFRS 16 and ASC 842 – have brought new challenges to the accounting profession in the retail industry.

For many companies, adopting an on-balance sheet lease accounting model is a significant challenge by itself because of the requirement to capture and record substantially all leases. For retailers, however, there are activities common that create industry-specific complexities for the ongoing application of the new lease rules.

“Entities in the retail and consumer sectors are generally prolific lessees and, at times, lessors of assets. For retail and consumer companies with a significant portfolio of leases, the ability to gather the required information on existing leases and capture data on new leases at the outset will be critical to an orderly and smooth transition to the new standard. This may result in the need for new systems, controls, and processes, which will take time to identify, design, implement, and test.”