<img src="https://secure.leadforensics.com/85060.png" style="display:none;">

What risk managers should know about coming changes to the accounting treatment for lease obligations

Many organizations lease assets such as real estate, airplanes, trucks, ships and construction and manufacturing equipment. Because of the prevalence of leasing, it's important for users of financial statements to have a complete and understandable picture of an organization’s leasing activities. For this reason, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have issued guidance and a proposal to change the accounting treatment for lease obligations. This isn’t new. FASB/IASB have been working on this revision since 2005. For those who like to get the details, see this FASB update from last month. (These changes are supposed to be effective in 2016, but given the magnitude of the impact, it could well be 2017 or 2018.)

As a risk manager, you may say, “Yes, this is interesting, but what does that have to do with me?” The answer could be "A lot!" depending on the structure of your property and casualty insurance program and your surety bond program. For example, when the forward obligations for leases have to appear on the liability side, the accounting rule change will make a pretty significant change in your company's balance sheet. Generally speaking, it will give the appearance that your organization has a lot more debt than was previously disclosed. This will likely have immediate impact in two areas: casualty collateral and surety collateral.

Topics: risk management Policy and Insurance Program Management Exposure and Asset Management

How to Avoid Replicating the Auditing Department's Job

Yes, having access to audited and auditable data matters for many different aspects of risk management. On the other hand, risk managers want to avoid audit replication by not attempting to do or redo the auditing department's job for them. When, for example, a risk manager finds herself spending most of her time auditing for insurance renewals and not working with brokers to get the right coverage at the right price, there may be a problem with the company's processes.

Topics: insurance renewal management Exposure and Asset Management

How an RMIS Fits into a Company's Risk Management Process

 

Many companies already have risk management strategies in place. Managers of these companies may wonder how a risk management information system, or RMIS, can help them improve their processes in order to save time, get better results, and of course, reduce the chance of accidents. At the same time, managers may wonder if they will have to change the way that they do business in order to implement new technology.

Topics: data management cost allocation & calculations performance management Exposure and Asset Management

Top 4 Reasons Risk Managers Use Risk Management Software

One of the most useful tools for risk managers is risk management software. This software can help risk and safety management employees, asset managers, and even corporate executives make better decisions about ways to reduce the chance of hazards, protect workers, buy insurance, and save money. Consider some of these top reasons to use risk management software:

Topics: risk management performance management insurance renewal management Exposure and Asset Management