Global Financial Reporting and Valuation conference - KPMG€¦ · tools that help our clients to leverage their fixed asset data to generate insights through the use of analytics

Global Financial Reporting and Valuation conferenceFontainebleau Miami Beach, FL

December 8–10, 2019

2© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDP036451-5C

Notice

The following information is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

Enhancing your real estate decisions with real estate portfolio intelligence

Fontainebleau Miami Beach, FL


Fixed assettechnologyFontainebleau Miami Beach, FL



Dashboards, like the Real Estate Portfolio intelligence (REPI) and Fixed Asset Intelligence Dashboard (FAID), are tools that help our clients to leverage their fixed asset data to generate insights through the use of analytics.

Fixed asset technology today

DataFixed asset data is transformed and compiled in order to be used for visualization purposes. Data can be static, historical, or for current and future periods.

InsightsVisualizations driven by transformed data allow for greater transparency into fixed assets and may provide insight into problems and potential solutions.

ActionInformed action can be take place when solving internal issues, completing transactions, or by increasing efficiency and accuracy for reporting functions.


Customized dashboard overlay— Basic dashboard includes data-driven visualizations

such as maps, charts, and graphs, all of which are fully customizable

— Featured KPIs can be static, or set to show changes over time (depending on provided data)- Occupancy, NOI, IRR, Debt/Equity Ratio

— Property KPIs can be compared to portfolio averages, as well as market data

Data transformation and dashboardingFinancial data Visualizations

Customized data transformation tool— Financial and other property data is analyzed in

order to effectively build a transformation tool that produces a consistent output

— Tool is fully scalable and embedded into existing IT infrastructure and financial systems

— Historical records and third-party market data can both be integrated into the tool

— Error checking capabilities are built into the tool


Account mappingRaw TB

Propertyinfo

Exception reporting (error checking)

User interface

Process in Alteryx:

How does REPI work?

Data transformation drives visualization— Data from various sources can be combined, transformed, and used for calculations, prior to being used for visualizations

- Data sources including accounting systems, property management systems, and third-party market data reports— Custom tool is built to ease client data transformation by increasing efficiency via automated processes

Data calculations Export into Power BI or QlikData transformation

Visualizations and dashboard


Export to dashboard

Comparisons to market data

Automated valuation

Property data transformation

Why is REPI useful?

— Data transformation allows for data to be prepared for visualization, and:- Ability to automate and update valuations on a regular basis, check errors in source data, drill down into data detail

— Dashboarding provides greater insight into the portfolio performance as a whole, and:- Property and portfolio comparisons, market data comparisons, sensitivity analysis of valuation estimates


Detailed viewCompare current and historical property expenses and revenues.

High-level viewDisplay property-level details and key measuresof assets within the portfolio.

What can REPI look like?


What is the fixed asset intelligence dashboard (FAID)?

Fixed asset controls Decentralizedsystems

Financial reporting requirements Asset lifting

Parent/child mapping

Prior purchase accounting

Asset validation FA classifications Accounting & tax optimization

FA proceduresand policies GAP assessment Tax requirements

Grouped assetcapital entries Tax opportunities

Ghost Assets Uniform FA data Automation

Graphical Visualizations of complete fixed asset

system data

Existing fixed asset systems and data


Traditional fixed asset systems and challenges

86 92 64

Challenges in maintaining and tracking accurate fixed asset records for financial and tax reporting

Diminished ability to quickly and accurately analyze asset population for management functions and planning

Demonstrating sufficient control over the asset base and providing supporting documentation

Implementation of ERP System/migration to the Cloud triggers a need for Creation of “upload ready” asset listing for new systems

“Decentralized” fixed asset procedures/controls (e.g., capitalization policies, asset classifications, assignment of useful lives) across multiple business units and/or manufacturing locations

Differences in book vs tax ledgersvs physical operations


How innovation and technology addresses traditional fixed asset challengesOptimization of fixed asset processes, ledger data, and associated internal controls

Fixed asset ledger improvement for optimized internal asset management process and ROA

Transformation of the fixed asset record to report process. Including fixed asset record policies and procedures development/improvement

Data migration to new management systems

Fixed asset ledger improvement for optimized internal asset management process and ROA

Financial and tax reporting compliance and potential regulatory benefits (PCAOP and Audit)


Why is the FAID useful?

Significant complexities exist in fixed asset systems which cause various strategic and operational challenges:

― Decentralization of systems may lead to inefficiencies and missed opportunities for a business

― FA systems and processes may limit understanding of the underlying data, which is critical to an organization’s ability to properly report as well as make good operational decisions

― Different stakeholders and objectives across organizational departments (operations, tax, financial reporting & accounting, etc.)

…current technology trends and innovation allow for a paradigm shift. As a result, organizations can use existing fixed asset data to:

― Gain insights on fixed assets across organizational structures

― Use existing data to better understand and deploy assets globally

― Consider more upfront planning

― Get better control over their data


How does the FAID work?

— Objective of the tool is to quickly provide company specific insights for the fixed asset system which identifies potential opportunities and risk exposure

— The tool is designed to identify fixed asset related (i.e., Ghost assets, FAM, Lifing) and Tax related (Cost Seg, Repairs, Reclass) opportunities for further exploration

— KPMG will then review the analytics and provide insight and recommendations based onindustry comparisons as reference point

— Output is customizable short-form visual report

Obtain fixedasset data

Data scrubbing& mapping

Cleansed FALinto dashboard

Customizable report

Taxanalytics

Fixed asset

analytics

Operational analytics


How FAID provides critical insight to change for your fixed asset system(s)

Data and systems

Leverage FAID insight to determine corrective actions (if necessary) and drive future operational and procedural decisions

Collect various existing FA database(s)

Fixed asset intelligence

dashboard tool

Existing FAL (GAAP)

Existing FAL (Tax)

Existing FA Technical

(Operations)

Historical FAS(Statutory)

Other fixed assetand property data— Operational info— Property tax info— Insurance coverage info— Leaseholds

Electronic transfer

Visual dashboard outputBy Business Unit or segregated facilities:

— Cost and NBV detail— Aging assets— Ghost asset analysis— Operational insights— Lump/group capital entries— Remaining lives by facility— Tax insights


How can a FAID diagnostic help your organization?

A FAID diagnostic can help by identifying and focusing attention on specific areas of opportunity in improving fixed asset systems

Align with industry best practices

Centralization of FAS data to assist forecast and planning for

— Operational personnel

— Finance and accounting

— Tax reporting and savings opportunities

Regulatory requirements for book and tax

Identify critical issues and potential solutions


What can FAID look like?


What can FAID look like? (continued)

Thank you

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDP036451-5C

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

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Global Financial Reporting and Valuation conference - KPMG€¦ · tools that help our clients to leverage their fixed asset data to generate insights through the use of analytics