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welcome to lessons learned transitioning to ASC 842 lease accounting presented by co-star and FBI thank you for joining us today before we get started I would like to share some information regarding CPE credits with you I appreciate your patience as I read this next slide today's webinar is worth one CPE credit to be eligible for CPE credit you must answer at least three out of the four polling questions during the webinar and have a total viewing time of at least 50 minutes participants will have the opportunity to download their CPE certificate immediately following the webinar if above requirements are met in accordance with the standards for the national registry of CPE sponsors CPE credit will be granted based on a 50-minute hour we are unable to grant CPE credit in cases where technical difficulties preclude eligibility CPE program sponsorship guidelines prohibit us from issuing credit to those not verified by the technology to have satisfied the minimum requirements listed above I encourage you to download today's presentation which is located in the resources widget on the left hand side of the screen after this presentation this webinar will be available on the FBI member site where you can replay it and download at the end of the webinar you can retrieve your certificate in the certification widget in the lower right hand corner of your screen below the resources widget is the Q&A box please feel free to ask questions throughout the presentation and the presenter will answer as many questions as he can and now it is FBI's pleasure to introduce our speaker for today Matt Watters Matt Watters is the former lease accounting manager with Home Depot for six years and American Tower he has co-stars subject matter with more than 15 years of management experience in accounting and finance welcome our speaker Matt hi everyone thanks Juliet this is Matt and I appreciate that introduction I am a CPA I've been working in lease accounting for for a number of years as Juliet mentioned at at the Home Depot and also at American Tower which is a cell phone tower company with with over a hundred thousand leases and I was you know if you'll humor me with a quick story as we get started I was at a birthday party over the weekend that my kids were invited to and and like probably many of you you know the kids are playing and I stand on the side and talk with other parents and somebody start asking me about what I do and I explained it and turned out that that that person worked in accounting too so they were one of the few people who were interested in lease accounting and you know I ended up related lease accounting when I took the CPA exam I think that's the first time I heard about it we didn't even study it in college or maybe it was just one page in the textbook and from the CPA exam it was you know four bright lines tests to memorize and I literally thought I would never use that again so you know famous last words I guess and now I do this every day but I worked with co-star now for a little over three years I joined co-star really in the same month that the standards were issued in early 2016 and in that time over three years we have helped hundreds of clients successfully transition to ASEA 42 lease accounting so my goal today is is just to share some some lessons learned and really you know really common issues and challenges and and the best practices or you know just some tips that we've we've picked up along the way now largely the standards have remained the same we've had a few revisions along the way but really the point today is to get a little bit more in the details and under the surface of what goes on in a compliance project and unless you learn from from some of the experience of clients and and just other other experts that we've talked with along the way now we're organizing the discussion today into three categories and those our project management accounting policy and software product essentials and there are other categories we could we could dive into but in an hour discussion I think these are the most important and really we're focused on two two main areas or audiences large private companies and late reporting public companies and viley reporting we mean with a fiscal year so some companies and not even if they're public they did not have to comply based on the calendar year they have a little more time and then the second category would be enterprise organizations that have experienced a project failure and unfortunately we have seen that fairly often here recently it's become a frequent occurrence where companies will approach costar and say you know we have selected a different solution or we've tried to do this manually using Excel where we haven't made the progress we needed to by now and you know basically we need help so from talking with those people we we know some of the things to watch out for and some tips to share in that regard now I guess fortunately [Music] costar has not had any any clients in that category so as I mentioned we've helped hundreds of clients successfully prepare for this so we are happy to share that and Juliet I think that brings up our first polling question okay great our first polling question today which of the following best describes your company and status for ASC 840 to lease accounting transition private company working on transition public company with late reporting and working on transition public company already successfully transitioned public company that should be transitioned the foot project experience failure or having trouble finishing transition we will give about 10 to 15 seconds for our audience answers for polling question please remember to click the submit button for your response okay I'm going to switch over to the result where you are Matt okay thank you all right so over half of the audience is a private company which which i think is is reasonable based on where we are in the time line we have a fair number of people in public companies that have already successfully transitioned so that's great news we do have a few folks who have experienced some some trouble or even project failure and so you know I think we'll be able to provide some insights today that might help move forward in that situation and certainly the lessons learned will help the group who is ready to get started or currently working in transition so for the the 8% that did say that there have been some some troubles or project failure you're not alone you know we've we've seen data that the big four puts out big four accounting firms that around twenty five percent have have experienced failure or really some major challenges along the way so but you know that's that's really interesting but again it's just it I think it comes down to just the fact that this was a largely simple process before I mean there were specific rules to follow most leases were straight-lined and had a P&L impact and now it's just an incredibly more complex process so again we'll talk we'll talk about some of the issues that have occurred so looking at our our areas will start with project management so it's a of course transitioning to the new lease accounting standards is a project most large organizations have a project manager involved either internally or or through a help type resource but at a really high level the project involves collecting lease data communicating with a diverse group of stakeholders selecting a software solution and ensuring resources are available for the success of both the project and ongoing compliance and I think that's something that's really important to remember is that this is not a one-time event leasing you know unless unless the company decides to to stop leasing which we haven't seen this is an ongoing business practice and and this will continue to be an accounting exercise at at every reporting date into the future so very important to remember that it's not just a one-time transition project it's you want to set yourself up for success out into the future as well well diving a little deeper into the data collection aspect it's it has been amazing as we as we walk through the past three years companies just can't believe how many leases they have and that's that's really largely due to the the kind of siloed approach that we have seen it at a lot of companies where you know so easy to obtain leases and you know fairly easy to account for them that a lot of times the divisions or or even individual locations at a company have authority to execute a lease you know just sign a lease contract it flows through the payments flow through their P&L and that was really the the endo there was in many cases not much involvement from corporate accounting or financial reporting even even though for public companies there was the requirement all along to report a lease commitment five years and thereafter even that a lot of times could be could be figured out from some simple analytics and all of the data points that are needed for new lease accounting were not required but now now they are and in some of the you can see on the screen now some of the sources that we see companies having success with include these I won't read all of them but the legacy real estate system for just because of materiality the large dollar amounts typically involved with real estate leases a lot of times there's a system already in place for that sometimes the there are vendor software's especially with fleet so if you have a sales force that as a company car for every every member of the sales team or something you could potentially get data from the vendor that provides the fleet service and then honestly all the way down to two file cabinets and desks we have we have some people that that are digging those out in various locations around the world and again the point here is that is it's just in almost every case it's a surprise for companies when they learn actually how many leases they actually have now there are some cases where leases are embedded and and this has been a little bit of a buzzword throughout the process embedded leases just basically means that you have a larger agreement and there's some asset involved in the agreement and the lease for the asset is embedded in the larger agreement so be a simple example of this is a alarm company so if you you monitor you have monitoring with your alarm company they they call the police if if somebody trips a sensor or something like that so the larger contract in this case is for monitoring but a lot of times the equipment the keypads and sensors and and things that you need for alarm system are part of that contract included so technically there is a asset involved in that larger contract now that that's a simple maybe even in many cases immaterial example but this this can get very material for items like large IT hosting agreements where there's a there's a hosting agreement in place it can be you know hundreds of thousands or even millions of dollars and as a part of that there are servers sometimes the servers are assigned to the company and and no other company can use them even though they they're not on company premises they may be segregated and only used by by the company so in that case you probably have an embedded lease for servers so just a good idea to review lists like you see on the screen now to just think about if if any of these scenarios or any contracts you have made including if these types of equipment or other assets and later in the presentation I'll give some resources where you can you can download lists like this another important part of the project management process that is sometimes overlooked is meeting with a cross-functional group of stakeholders and you know this group will have various roles throughout the project and some will be involved almost everyday some just need to be aware and provide input at key times but real estate is is usually quite interested in this project and they're involved on a day to day basis property management lease administration if that's separate from real estate same thing the maintenance department to the extent that that you have equipment like forklifts and intelligence and so forth many times those are leased logistics IT procurement legal all of these departments are involved typically with the leasing process and and then in the finance area we have really accounting is an obvious one because of the accounting changes and the impact to the balance sheet that's taking place here but but FPA or financial planning needs to be involved for budgeting purposes Treasury is typically involved because of the requirement to have a incremental borrowing rate and and a lot of times also in in lease versus buy decisions Treasury has a has a say in that also debt covenant impact this is this change has has changed some of the analysis around around debt covenants and then one often overlooked area is the tax department this change also creates some book tax differences that that have changed so again it's I think some of these are obvious some are or not so obvious so another another helpful list I think just to make sure that you involve the right people in the beginning of the project make sure that that everyone's needs are met and just one piece of advice from this slide is sometimes the more operational departments feel like they're losing control you because they've they've largely had the ability to execute leases on their own you come in people from from accounting and and other departments come in and talk about you have to let us know from now on every time you execute a lease and they get defensive about that and you know in our experience and being in many many of these meetings however I think it's important to point out that we're really given the department's more control more visibility into what they're spending and and and this can actually end up saving money in the long run and free up resources for other things so I think it's a it's ultimately a positive thing the next next section under project management is software selection so really a key piece of advice here is is just make sure you know what you're signing up for and the best way to do that is view a live demo at a very minimum make sure that it's it's it's not a canned you know you're not watching a video you're actually in the system seeing a live demo and and then you can also ask for a pilot where you actually can then log into the software and import some of your own data run through some scenarios and I'll just make sure ahead of time that the software meets your needs and and you see a list of things here that the leading software companies can provide including design services the nuances of equipment and real estate leases so that's important there are some differences in what you need to track to make sure that the equipment and real estate is included the collection of lease data you know software vendors well leading vendors can provide help with that and and functional currency you know this is something that if you if you have it you you probably know but but maybe for some companies who who may in the future be operating in different currencies it's really important to make sure a software has this functionality because there there are very specific guidelines in in the lease accounting standards about dealing with functional currency and and integrations I think is another key one that I'll point out you want to make sure your your software has robust integration capability you know even if you don't use it right away it may be something you want to do in the future to increase efficiency another another aspect is the HR impact so the projects of course take extra manpower to to to complete and many times we're seeing that lease accounting departments are being more heavily staffed than they were before the transition and and that's just because they're the complexities involved so there are multiple options here you know really just getting getting comfortable with the idea of either hiring people to work on the project and or supplementing the staff with with an outside resource like a accounting firm or our consulting firm has proved to be very beneficial okay Juliet okay our second polling question what aspect of lease accounting compliance are you most concerned with gathering all the leases and finding all the embedded leases proper separation of lease and non lease components and accurate key assumptions and variables or something else we have not discussed yet today give about 10 to 15 seconds for the next polling question please remember to press the submit button when putting in your response okay going to the results slide back to you Matt okay Thank You Juliet so it looks like the by far really the one about gathering old leases and funding all the embedded leases is of top concern and and I think as it should be I mean that's a as I mentioned that's that's quite an arduous task and companies are constantly surprised at at the amount of data that they end up collecting we've we've even seen some have to go back twice which we we hope to avoid right and again I'll give you some resources at the end that you can download and and I use as a checklist to make sure you you only have to do this process once proper separation at least non lease components yes that's a that's a big concern as well for for some people you know particularly around if there are gross lease is involved where for example real estate lease that includes rent and common area maintenance all in one number splitting those out can be difficult although there is a practical expedient that can be used to help with that inaccurate key assumptions yes very common as well and many many assumptions have to be made as a part of this will touch on a few of those in the presentation and something else we haven't discussed yet what would love to see that submitted as I as a question if if you selected that one feel free to send that through online so the second area that that we've seen really really use up a lot of time and in many cases more time than expected has been accounting policy and really the it's it's key that you have somebody at your company is the champion of this and it has extensive experience and understanding of the standards and again you know if if that you know this point three years in there are there are consulting firms and accounting firms who have developed a lot of experience in this area so if you if you feel like you need help on that we can we can absolutely connect you with somebody but but really the nuances of transition accounting it's really two separate accounting policy in broad accounting policies that you need to tackle is the transition accounting and then the day to the good for a good forward accounting compliance we see those as really distinct decisions that need to be made and and honestly much more once clients have gotten into the project I think they determine there's month many more accounting policy decisions need to be made than originally thought and so let me give you a few examples transition accounting their example here is does the opening right of use asset always equal the lease liability so you know this very common question we get especially as clients are reviewing their amortization tables for the first time because sometimes those two numbers do not equal in fact most of the time during transition they don't equal and the reason is that the the deferred rent balance under prior guidance it's sitting on the balance sheet at transition that number actually becomes an adjustment to the opening right of use asset and and that's just the mechanism that has to be provided and in the end it all things being equal you end up with the same expense on your P&L every month that you had under a SCA 40 the straight-line amount under a CA 40 remains but this this transition policy around around using the deferred rents as an opening right of use asset adjustment is a key component of that of that exercise otherwise you you really can't follow the modified retrospective approach and end up with a with a straight-line expense on your ple remains unchanged so it's a it's a key aspect and you know in the go forward category there there are other times when you need to adjust that opening right of use asset and for example that includes times when you have a direct cost like a commission or really any other expense or even an incentive that comes in that happens before the lease commences or even on the on the first day of the lease so transition accounting is is is one area that we need to focus on you know really let me go back to that slide just for a second also in transition some things to think about include the practical expedients that are available those well can can save companies just incredible amounts of time by using the practical experience that were offered in the guidance now moving on to the ongoing accounting compliance policies around that really we've seen this companies already you know even even only a few months in already are having to make a lot of decisions around how do account releases going forward and it's just such a fluid environment you know you have terminations that happen you have you know renewals that occur even partial terminations and there's very specific guidance in the gap about partial terminations and it it requires specific functionality in a lease accounting software to comply with GAAP when you have a partial termination in many other scenarios the change to the lease liability is the same as the change to the right of use asset however in a partial termination the right of use asset is changed typically by a different amount in the impact to your lease liability so just the nuances like that that they really can only occur in day two or after the initial compliance project but it's wise to begin preparing for those now and and certainly test the any software that you choose make sure that it handles these day two scenarios their assessments around what is reasonably certain so the the guidance says that you have to change the amortization of the lease at the point that you decide you've become reasonably certain to exercise an option for example or to or to exercise a you know a renewal option a termination option or any lease event like that you you need to periodically revise your assessments of what is reasonably certain in the future and and that becomes very important not not just from a software perspective but just a business policy and practice setting up a cadence of check-in meetings probably with the with the decision makers for example the the VP of real estate may be volved in a quarterly meeting with accounting to to reassess whether we are reasonably certain to exercise options or not index events escalations that are tied to CPI for example this this becomes very important and this is actually one of the differences between IFRS and US GAAP IFRS requires a remesh every time the index changes the rent US GAAP does not require a remeasurement so this again is something that only happens in day two or after the initial transition event but certainly something to keep in mind as you're you're setting up policies data collection our data Corrections have have already happened and you know it's just a it's it's just a function of the fact that the accounting department rarely receives a hundred percent perfect information before month in closed and and so you know when that happens it's great but when it doesn't happen there needs to be a correction made so that's something to consider what is your company going to do when information comes in after month includes or when the information is revised after you've already booked the journal entries and and you know really the the accounting software can help you out a great deal and that's an area the functionality exists to perform retrospective true ups which is something that we as accountants are quite familiar with you know it in that situation where you have late-breaking information or you know you you book an accrual let close and then in true up once you know the actual amount same kind of prints here if you've already closed the books you've recorded journal entries under what was known at the time of month and closed the retrospective remeasurement or retrospective Tura functionality allow you to go back and in the current open period just booked a change or just the Delta - what was - what was recorded before so essentially you you can record a true up entry automatically so something to to keep in mind and certainly test in the in the beginning stages of the lease accounting compliance project I mentioned this briefly earlier but currency considerations can can really become quite a topic in a in a compliance project and again maybe another area that's not commonly thought of in the very beginning but if you do operate in multiple companies or if you see that as a as potential in the future if you think you may expand internationally it's definitely something to make sure you have the functionality in the lease accounting software to accommodate and and this is because the functional currency requirements under ASC 842 and an IFRS 16 for that matter require that the asset related balances which are non-monetary these assay related balances need to be converted at the exchange rate that was in effect at least inception and that applies for the entire term of the lease so it's a historical rate from the first day of the lease or lease inception now the liability side of the equation that that gets converted going forward at either you know monthly spod rates or monthly average rates you know largely depending on your policy and how you have your ERP system collects that and your rule will set up there but what we've learned is that while the ERP systems are are very well equipped to handle those monthly average and spot rates the concept of tracking a lease inception rate is something that is a little more specific to leasing and so you need to make sure that that you have a process in place to capture that and that the the lease accounting software has a field for that okay Julieta brings up our next question okay great next polling question what is your company's current status for selecting a software mat system to manage data and perform ASP 42 accounting calculation we have a proven system already up and running we've identified some options and are evaluating them we're interested in finding options to review or we believe our Excel spreadsheets will define for our needs remember to submit your response and we'll give about 10 to 15 seconds for the next poll okay I'm - push the results line now back to you Matt okay great thank you it looks like pretty even distribution here proven system already up and running evaluating options interested in finding options to review and you know actually might be a larger group than I expected thinking about relying on Excel and you know so I would say if you have more than a handful of Lisa's Excel might not be the best option for you and not because that it's impossible because you know it certainly is a robust tool and accountants are quite familiar with it we use it all the time but again if you have more than a handful of leases the calculations and just the tracking of the right of use asset lease liability recording the level expense or straight-line expense for operating leases which is a combination of the interest expense and asset depreciation you know it just gets it gets very complex very quickly and you can manage in Excel for individual leases but I think really the key in my experience with Excel is that you'll you'll have a kind of power user that gets gets it set up and they know they know how everything works and the templates that they created sometimes they have macros and that kind of thing however if that person transfers to another department or leaves the company many times you're left with a with a Excel workbook that's complex and not many people know how to use so you know maybe there's just something to consider again if you if you have more than a handful of leases okay so so talking about now the software product essentials you know again I think I just just said this now that the lease accounting calculations have become more complex and I'd say that fact combined with the the certainty at this point of scrutiny from your auditors next time they come around has motivated a lot of companies to select a software solution and I'll give you some of the some of the characteristics that are important to consider as you're selecting software really a is a stable structure make sure you understand the the you know basically the balance sheet of your software provider you know do they they have the resources to to be around with you and partner with you for the long run and a strong balance sheet and and a long history in the space I'd say is is something to to look for and be aware of now the at this point three years in from the time the stands were issued we've had co-star hold the big four accounting firms you know and and most of the larger you know the other accounting firms have all hammered on the system and and they've all developed opinions about different software's they're out there so I would strongly recommend you know talk with a tough with one of the big four or or your your accounting farms that you do business with and and see who they endorse or recommend see what knowledge they've picked up over the past several years you know a part of that I think is is go ahead and ask very specific about features that you know you need and even even from this presentation features that we've mentioned and you know you can go ahead and ask accounting firms or even as a part of the RFP process as you're looking to select or the short list of vendors you want to look at make sure that the features you want are available and I think this one is is vital the concept of battle-tested or or you know how long has this solution been around and you know the fact is i mentioned a little bit of my experience in the very first part of this presentation effective lease accounting is nothing new now we have new standards now but largely the calculations are are the same we've we've had capital leases since the late 1970s where you have a an asset that you amortize you have a lease liability and so the concepts and you know really the math and the the core functionality to software has not changed that much now there are many many more complexities involved but I just think the idea that that that lease accounting is brand-new and you and I think we've seen a lot of different options pop up just very recently I would strongly suggest looking for a company a software vendor who has at least a decade of experience in this space and again if it is an accounting intense exercise so ask how many how many CPAs they have on staff how many people with real-world month in closed lease accounting experience do they have who will be available to you in the future real-estate and equipment and you know the hand is very important here so it's important to make sure that the the equipment side of the house is taken care of is so much more scrutiny now around leases that did not need much much care from the accounting department before because if if any leases were inherently straight-lined before this change it was the equipment leases Home Depot for example we had we had thousands of forklifts but a lot of times those were just one monthly amount every month no need to develop a straight-line schedule to account for those because they were inherently straight-lined now all of those forklifts do need an accounting schedule because they may now have right of these assets and liabilities involved so just something to think of there make sure that the software you select has equipment and real estate cover because there are differences on a trail so I mentioned that the certainty of upcoming auditors scrutiny audit trail is essential so not really not only for the betrayal of the journal entries and the financial data that ends up flowing into your ERP system but also for for control purposes you want to be able to see who make changes to a schedule and you know who who abstracted Elyse for example who created the accounting schedule and it's really a related topic but not quite the audit trail but the separations of duty that will become important because of these payments are going out a lot of times from the same system that is performing the lease accounting so you want to make sure that you can separate duties and and not have the person authorized to generate payments be the same person who is authorized to record journal entries and account for those payments so it's something to consider there for audit purposes free upgrades we've we've seen seen some systems and I've had experience with somewhere it just it gets it gets outdated it costs sometimes millions of dollars to upgrade to the next version and you see you see companies skipping versions and and ultimately sometimes even the software becomes obsolete before the because it's just so expensive to upgrade so always seeing here in the software industry is that the really the leading practice now is the is the fast based software as a service based model or cloud-based where you you get updates automatically and and I'd say that is just vital to do this this process now lease accounting compliance because it we're just so new in some of these new rules the there's still some diversity and practice and and some even even recently we have some organizations petitioning faz be to make some changes so if something changes in the accounting rules you want your software solution to to be cloud-based and really agile and and where you won't have to go to a new version but you can in a matter of you know days or weeks you can you can have the software up and running with with new information that becomes available so again just faz model cloud-based with including free upgrades I think is quite important the shock audit and this is something that is is really important for auditors as well so basically the shock audit helps in the audit in your annual audit process to to make sure that the controls in place at a software vendor if the if the vendor is providing data that you use in your financial results that the controls at the vendor are appropriate and it just eliminates the auditor having to come out and and test the vendor separately so it's a really important aspect he certainly want to make sure your your software vendor has can make this available now there is I'd say a common misconception here that a sock audit can provide assurances that the your lease accounting results you know your individual company's lease accounting results are accurate so that there would not need to be any testing around the financial results and unfortunately that is not the case companies are responsible for their the results that are presented on their financial statements and the auditors are responsible to test those so while the the controls would not have to be retested I anticipate auditors still testing the the actual results so for example taking a sample of new leases and and then from that sample asking for the calculation of what you what you recorded for right of use asset lease liability and then and then making sure they can tie that out I would expect would be a very frequent exercise that alters will go through and a sock audit will not satisfy that the sock Adi will only satisfy the controls okay that brings up our next polling question Julia great okay this is our final polling question for our webinar today how does your organization plan to interact with auditors for ASD 842 we discuss our project plan and policy with our auditors already we've plan to review our project plan and policy with our auditors we are getting accounting feedback from other internal and external sources and we will interact with auditors during the audit or we're not sure yet give about 10 to 15 seconds for this last poll and please remember to submit your response okay I'm going to switch to the results line now back to you mess okay thanks Julia okay yeah so pretty pre even here um the let's say the the first two I think are are very wise you know discussing it already with the auditors to me that that makes a lot of sense uh saying that be quite successful the I think that just one one quick tip here that I've seen work is that it's best a lot of times not to go right away to the auditors with a question go ahead and and draft what you think is a reasonable approach and then just have the auditors sign off on that in my opinion has has proven to be quite successful and then in the end ends up saving you some some hours that they that they bill you for anyway so moving on to the next slide integrations so integrations are vital to to many companies especially large multinational corporations that say you know sometimes there are multiple ERP systems involved and now you know we're seeing as accountants are quite familiar with trying to reduce month in close time you know moving activities into pre closed reduce the number of days to close the books and now in the accounting industry we're even or even hearing you know some buzz words around continuous accounting or continuous month in clothes where you can you can see results at almost any time and so of course integrations are vital if you're if you're moving in action like that and again not to comply with lease accounting you know you can you can take a very quick approach and at costar we even have some clients who have decided that they say hey we don't have time for integrations we're going to to take a quick or agile approach and we just want to file every month that tells us what to book in our journal entries and we can do that however it felt so important to remember that that integrations may be something you want to do in the future they're really really just wrapping up here I I'd say the making making sure that you're prepared for the future is is really top of mind you know it's not just a one-time event I promised some resources and so you can find these white papers and other resources at costar manager comm both of these are white papers that we we published and this is where they're in these two documents you'll find the lists that I mentioned earlier in the presentation so list of of common data points to be collected list of stakeholders that kind of thing so hopefully you'll find that to be valuable if you are interested and now I have not saved a ton of time for questions but I'm going to try to address a few and then also follow up with some of the ones that I can't get to I had one question come through that said about terminations when a termination occurs but the lease rolls into month-to-month status how do you handle that there's really a couple ways to handle the month-to-month status sometimes you hear this referred to as an evergreen lease that it just keeps keeps rolling at the end you know you can you can terminate that and expense those items as incurred if if you really are only in there for a short amount of time or I think there's an argument to be made that you should make a reasonably certain assumption at that point how long will you be in must a month status are you are you pointing to B as an option to extend the lease even longer so really depending on accounting policy you could be in a short-term leasing situation expensing as incurred or you could you could end up with a remeasurement event revising your right abuse asset and lease liability so I see where we're almost out of time so Juliet let me turn it back over to you to wrap up and and thank you very much okay great thanks Matt so I have a good amount of questions that came through and I will be submitting all questions to Matt following the webinar if we didn't get to yours today so we will be addressing those no worries so this marks the end of our webinar today thank you everyone for joining us please remember to download your certificate some certification widget which is in the lower right hand corner of your screen we look forward to you all joining us on future webinars you can find information about upcoming webinars in the resources widget if you have any questions regarding CPE credits please email CPE at financial executives org have a wonderful day and again thank you to our speaker Matt waters