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Best Compliance Advice: Start Early

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Typically, there is ample time to prepare when a new regulation or change to an existing regulation is announced. Smart finance executives don’t squander the opportunity to review their systems and processes, with a view toward not only meeting new regulations but also improving performance.

Leaders such as Microsoft are getting ahead of looming deadlines for changes in the revenue recognition and lease accounting standards. The software giant adopted the two new accounting standards this past summer, in plenty of time to meet compliance deadlines.

The reason for this is twofold, Microsoft’s Chief Accounting Officer Frank Brod explained. “We chose to adopt the new standards early, primarily to simplify the communication of our results by eliminating the need for non-GAAP revenue reporting,” he said. “We have also chosen to early adopt the new leasing standard in order to provide one set of restated financial statements to investors.”

As a result of adopting the new lease accounting standard, Microsoft will see a net increase in assets and liabilities of $6.6
billion as of June 30, 2017, and a net increase in assets and liabilities of $5.2 billion as of June 30, 2016. The company “will now record our operating leases related to data centers, offices, research and development facilities, retail stores, and various equipment under the operating lease right-of-use assets, other current liabilities, and operating lease liability lines in the balance sheet,” Brod noted.


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Toppan Vintage

Toppan Vintage is a leading international financial printing, communications and technology company dedicated to delivering a hassle-free experience with the highest quality accuracy, reliability and value for your organization’s financial printing and communications needs.

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