RILA recently held a meeting of its Finance Leaders Council, comprised of members’ Chief Accounting Officers and Controllers, in Washington, D.C. Subject matter experts from Ernst & Young, White & Case, University of Leicester, and RILA’s Government Affairs team provided attendees insights and updates on important issue impacting retail companies and their finance departments. Members also benchmarked and shared company experiences with key industry accounting challenges, and networked with retail finance peers.
Tech Transformation of Finance Functions Requires Finance Professionals to Gain New Skill Sets
Myles Corson, Markets Leader, Americas, Financial Advisory, EY kicked off RILA’s Finance Leaders Council meeting with a presentation on how organizations are using data as a strategic asset. To help drive company performance, the finance function is undergoing a technology-led transformation. Michel Porter, West Region-Digital Audit Lead, Assurance and West-Innovation and Digital, EY articulated the need for future finance professionals and auditors to develop data analytics skills and highlighted the use of robotics process automation (RPA), machine learning, artificial intelligence, and blockchain by finance department and auditors.
SEC/PCAOB Public Policy Updates
Shauna Steele, Director, Executive Management, Americas, Public Policy, EY gave an overview of the political landscape in Washington, and the U.S. Security Exchange Commission’s (SEC’s) current focus on capital formation and financial reporting transparency. Katie DeVito, Senior Manager, Assurance Service, EY reviewed recent SEC comment letters topic trends, including the SEC’s focus on management’s discussion and analysis, Non-GAAP policies, fair value measurements, segment reporting and revenue recognition. Katie also provided updates on the critical audit matter (CAM) program implemented in 2018 and ASC 606, Revenue from Contracts with Customers.
New Lease Accounting Rules Implementation Trends
Jeremy Simons, Partner, Financial Accounting Advisory Service, EY and Julie Kunkel, Partner, Accounting Advisory Services Global Sector Leader - Consumer Product and Retail, EY covered ASC 842 (reassessments, re-measurements, and modifications) and highlighted 10 items for retailers to consider after the adoption of the new lease accounting standard:
- Systems, processes and controls
- Definition of a lease
- Allocation of payments to lease and non-lease components
- Lease term
- Discount rates
- Modifications/reassessment events
- Presentation and disclosure
- Sale and leaseback and build-to-suit transactions
Update on New Proposed FASB Tax Disclosure Requirements
Sean Lyons, Associate, White & Case reviewed the Finance Accounting Standard Board’s (FASB’s) new proposed tax disclosure requirements and the key issues and concerns highlighted in RILA’s recent comment letter. Noting that, similar to RILA’s position, the vast majority of public comments to the proposal were negative, Sean provided an analysis of the common themes and issues raised in public comments and insights into FASB’s next steps.
Navigating the Evolving Retail Loss Landscape
Adrian Beck, Emeritus Professor, University of Leicester presented on his ongoing research with RILA on Total Retail Loss, an effort to redefine the narrow view of “shrink” to include other business factors/losses that have an impact effect on company profitability. Professor Beck is currently working on his second report with RILA, set to be release at the end of the year. His first report, Beyond Shrinkage: Introducing Total Retail Loss can be found here.
What’s New in Washington - RILA Public Policy Update
RILA’s government affairs and legal and compliance team provided updates and insights into current federal legislative and regulatory issues. Dave Koenig, VP of Tax, gave updates on legislative proposals related to tax, 401K enrollment, and IRS reform. Hun Quach, VP of International Trade, provided much-needed clarity to today’s chaotic trade landscape. Nick Ahrens, VP of Innovation, discussed RILA’s efforts to enact federal privacy standards and Austen Jensen, SVP of Government Affairs, provided insight into the upcoming 2020 election cycle.
RILA members consistently rate the opportunity for peer-to-peer benchmarking as one of the most valuable benefits of active engagement. Meeting attendees discussed a variety of practical questions with their retail peers such as demonstrating value with financial department metrics, intercompany/legal entity accounting, omnichannel accounting, international finance systems, payroll pay periods, and planning and recruiting strategies.A huge thanks to White & Case for graciously hosting, our sponsor Ernst & Young for all their help in putting this meeting together, and RILA’s Kathleen McGuigan, EVP & Deputy General Counsel for her work over the past two years leading the Finance Leaders Council.
For more information on this meeting or to get involved with RILA’s Finance Leaders Council, please contact RILA’s David Koenig, who will be taking over the leadership reins of the Finance Leaders Council moving forward.