Largest global pharmaceutical and wholesale/distribution company engaged Jefferson Wells to lead their comprehensive PMO for lease accounting standard change.

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Business Issue 

Our Client is the largest retail pharmacy, health and daily living destination across the U.S. and Europe. The company has more than 13,200 stores in 11 countries as well as one of the largest global pharmaceutical wholesale and distribution networks, with almost 400 distribution centers across 20 countries.  

Shortly after the FASB issued ASC 842-Accounting for Leases, our client was highlighted in the financial news as one of the top 10 U.S. corporations that would be impacted by the accounting change. Implementation of the new accounting standard would significantly change their balance sheet, and have a broad impact on debt covenants, accounting operations and real estate lease administration.   

The Chief Accounting Officer was required to provide quarterly updates to the Board of Directors Audit Committee and wanted to get an early start on preparing for the new accounting standard adoption. 



Our Client selected Jefferson Wells to lead the Program Management function for this initiative. We provided a Senior Program Manager to work directly with the Chief Accounting Officer and VP, Global Finance Strategy and Transformation on the Assessment Phase for ASC 842.   

We began by creating a project charter, along with identifying sponsors, steering committee, and core team members. As a global company, we also identified additional team members to represent all cross-functional areas that would be impacted by adoption of the new Lease Accounting standards for both US GAAP and IFRS. The expanded team included key accounting participants in all business segments, along with representatives from Legal, Treasury, Real Estate, Procurement, Fixed Assets, Operations, Information Technology and Lease Administration.  

We also assembled key Subject Matter Experts (SMEs) from Internal and External Audit, Financial Controls and Technical Accounting Advisors to provide expertise on specific adoption topics or approach for the project. 

A comprehensive project plan was developed and managed by the Jefferson Wells Program Manager. We provided on-going structure and governance for all project work streams, communication of status, and development of all project deliverables. Key activities included: 

  • Prepared and validated a complete inventory of all Lease obligations. This included all lease types, and key contract terms needed to determine Classification, Right of Use Asset value and Lease Obligation liability.
  • Reviewed and documented existing business processes to initiate, record, maintain, and retire leased assets across all business segments.
  • Defined key master data required to account for leases under the new standards and performed Gap Analysis to existing IT systems deployed across all business units and segments.
  • Defined all new disclosure requirements along with any other policy or technical accounting topics that needed to be resolved to implement the new standards. This included the impact on Tax, Treasury and Covenants resulting from expected changes to the balance sheet and income statement.
  • Prepared comprehensive Position Paper on the adoption approach. This deliverable summarized all work streams and a high-level plan for the Design and Implementation phases to follow. 

As the team worked through the gap analysis of required master data and IT functionality, it became clear that the existing Lease Administration systems were either outdated or incomplete. The two primary retail segments were using different Lease Administration systems, and both were several versions behind. The remaining business units were managing lease portfolios in Excel. Another project work stream was added to perform a full software requirements and selection phase.  

The Jefferson Wells Program Manager coordinated the documentation of requirements and performed research on leading software solutions to manage Lease Administration and Lease Accounting in compliance with new ASC 842 and IFRS 16 requirements. Seven software solutions were evaluated, and a formal RFP process was conducted with four vendors. Detailed product demonstrations and implementation strategies were reviewed by the team, and management recommendations were developed for the Steering Committee. 

Finally, the Jefferson Wells Program Manager performed an Assessment Phase gate review, including a formal project audit by the Internal Audit team, review, and input from external auditors of all Assessment Phase deliverables, and Design Phase project plan creation for the next phase.   


Jefferson Wells succeeded in leading the Client through the Assessment and Software Selection phases of their Lease Accounting initiative. We also prepared them for the Design Phase to define all new business processes, policies, controls, and systems required to adopt ASC 842 and IFRS 16 on time.