Implementation of the new lease accounting standard has led to average balance sheet lease liability increases of 1,475%, according to new research from lease accounting technology provider, LeaseQuery.
In an analysis of more than 400 balance sheets pre- and post-transition to ASC 842, LeaseQuery’s new Lease Liabilities Index report indicates that companies that have not yet transitioned to the new standards need to prepare for an overhaul of their financial snapshot.
Spotlighting the lease accounting transition impact across six critical industries, the research also found that:
“The FASB’s issuance of ASC 842, the new lease accounting standards, was initially put in place to increase transparency for all lease transactions throughout the business,” said Jennifer Booth, VP of Accounting at LeaseQuery. “With operating leases now requiring recognition of asset and corresponding lease liability, the level of balance sheet change ahead should be a wake-up call for businesses to expedite the journey towards transition and begin immediately.”
For more information, read the full report, Lease Liabilities Index: An Analysis of More Than 400 Companies’ Balance Sheets Pre- and Post-Transition.
LeaseQuery’s Lease Liabilities Index Report is a regular analysis of more than 400 public, private and nonprofit organizations’ financials spotlighting six critical industries – retail, financial services, healthcare, manufacturing, energy and restaurants – as they implement new lease accounting standards. The index is designed as a benchmarking resource to help companies assess and communicate changes to their stakeholders.
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