Just 26.3% of public company executives report that their implementation of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board lease accounting standards is complete, according to a June 2019 Deloitte poll.
“Most of our U.S. public company clients have completed initial compliance activities, but very few have fully completed their broader lease implementation efforts,” said Sean Torr, Deloitte Risk & Financial Advisory managing director. “I suspect we see a low rate of U.S. public company executives calling implementation ‘complete,’ because they’ve realized that ongoing work is necessary to build sustainable, long-term lease accounting programs.”
More than half of responding executives at privately held organizations with 100 or more real estate and/or equipment leases in their portfolios describe lease accounting implementation as “difficult.”
Mark Davis, Audit & Assurance partner and Deloitte private leader, said, “Just as private organizations can be large and complex, so can their lease portfolios. Even though the new, FASB-proposed extension would give U.S. private companies an extra year to implement the standard, that does not mean they should slow their efforts or wait until next year to get started. Many private entities have a lot of hard work still to do to hit the deadline.”
Deloitte suggests asking the following questions to assess how complete an organization’s lease accounting implementation efforts are:
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