IT, or not to IT?

Issue:You work in the accounting policy group for a consumer products company.The company has set aside funds

in its budget for a complete overhaul of its computer information systems this year. The CFO is aware that the FASB

and IASB are making steady progress on a project to overhaul lease accounting, which would put most (if not all)

leases on balance sheet, and has asked your team to work with IT to identify needed systems changes based on the

FASB's proposal. The CFO suggested that the company should adopt the FASB's proposals (and begin accounting

for leases under the proposed model) once the updated computer systems are in place at the end of this year.

You have been closely monitoring the FASB Board's recent meetings and proposed standard, so you have a

good sense as to what the Boardswantcompanies'accounting to look like.Your company has given you the green-

light to early-adopt the changes being contemplated by the FASB, and to incorporate these proposals into the new

IT system. But the question isis it the right thing for your company to do, to adopt this guidance so soon? Based

on your close monitoring of the FASB's recent meetings, you know this is the way the boards believe leasesshould

be accounted for.

Required:Draft a half-page to one-page response to the CFO's suggestion.