How Arch Capital Aligned Lease Accounting with Financial Reporting

Business is dynamically changing. And as an organization evolves, there will always be new areas to bring into the finance strategy, from financial close and consolidation, to budgeting and planning, rolling forecasting, tax provisioning and more. To prepare, decision-makers are looking for non-disruptive ways to expand financial processes and deliver more value across the enterprise.

Arch Capital Group faced this challenge in January of 2019 when the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) put the new  IFRS 16/ASC 842 Lease Accounting standards into effect. This standard requires all leases to be recognized on the balance sheet to reflect an organization’s right to use an asset for a period of time, and to report the associated liability for payments. Read on to learn how Arch Capital leveraged OneStream’s unified platform to achieve IFRS 16 and ASC 842 compliance without any headaches – or additional product purchases.

Arch Capital’s Journey to Compliance

Arch Capital Group is a publicly traded company with approximately $13B in revenue. They are a global company that writes insurance, reinsurance and mortgage insurance on a worldwide basis.

In a recent OneStream Customer Success webinar, Eric Capuano, Director of Consolidations and Reporting at Arch Capital Group, spoke about the company’s challenges meeting the new lease accounting standards. With over 60 leases related to office space and office equipment for locations around the globe, Capuano needed to keep all leases in scope, with immediate access to annual rent escalations, renewal options and improvement allowances. He also needed to be mindful of required disclosures pertaining to weighted average discount rates and remaining lease terms.

A OneStream customer for two years, Arch Capital has already gone live with the unified platform for Financial Close and Consolidation and Account Reconciliations. That’s why, when it came to tackling their Lease Accounting requirements, they once again turned to OneStream and our partner Agium EPM.

Agium EPM’s Lease Accounting Solution

Also on the webinar, was Peter van Ooik, Senior EPM Consultant of   Agium EPM. A OneStream Diamond Partner, Agium EPM developed a Lease Accounting solution that provides customers a starter kit to quickly realize IFRS 16 and ASC 842 compliance within the OneStream XF platform.

By making the solution available through the XF MarketPlace, customers like Arch Capital can avoid having to buy additional products to fulfill their compliance requirements. Instead they can simply download the solution and add it to their existing OneStream platform, without complex integration or development.

Key features of the Lease Accounting solution include, flexible lease payment schedules, multiple ways of setting up forward-looking budgeting and forecasting, and a prebuilt disclosure pack. The solution also offers the ability to generate adjusting journal entries in OneStream, or as an export to the GL/ERP system.

A Seamless Transition for Arch Capital

Since implementing the Lease Accounting solution, Capuano and his team have saved numerous hours and effort. They now utilize system-generated reports for complex calculations and are automating their footnote disclosures. Leases in foreign currencies are automatically translated into USD, with automated journal generation supporting both IFRS 16 and ASC 842 calculations.

Capuano now has an instant overview of all 60+ leases and can easily calculate the lease liability and related impacts while creating out-of-the-box reports and disclosures to report under the new standards.

Learn More

We invite you to watch the replay of our recent webinar, How Arch Capital Tackled Lease Accounting Requirements with OneStream. Hear from Eric Capuano about Arch Capital’s unique OneStream journey and watch a brief Lease Accounting demo by Peter van Ooik of Agium EPM.