Private Companies Tackle Lease Accounting Challenges as Public Firms Still Struggle
APR 1, 2022 - 6:40 am
According to LeaseAccelerator’s 2022 Global Lease Accounting Survey, which it conducted with Ernst & Young, with the ASC 842 and GASB 87 effective date delays over, organizations must now create, implement and sustain lease accounting compliance plans that harness processes, technology and people. The survey showed there is no ‘one size fits all’ perspective when it comes to balancing these key elements; however, there are opportunities for organizations to optimize lease accounting to increase business value and drive return on investment.
The 2022 survey findings indicate challenges such as lease accounting integration and governance continuing to lag other finance functions and new challenges for U.S. public companies stemming from team lease accounting fatigue and employee turnover. However, these challenges also present an opportunity, as many U.S. private companies indicated they are actively applying key lessons from U.S. public companies to optimize their current leasing processes.
Key Survey Findings
20% of U.S. private company respondents are starting implementation, and 32% have already implemented by adopting early, up eight times from last year.
40% of respondents said they return fewer than 70% of their leases on time.
Although 37% of respondents have more than 250 leases, most aren’t centralizing decision-making and automating processes.
Nearly half (48%) of respondents said their lease accounting is not fully integrated with ERP systems, creating potential missed opportunities for business optimization.
“The global economic environment has continued to be challenging. To manage the risk and uncertainty that goes with the growing challenges, taking control of lease portfolios and using automation to do more with less have never been more essential,” Todd Fredrick, CEO at LeaseAccelerator, said.
“I’m trying to provide direction, bringing a team together towards the common goals and values of the company. But overall … I attribute my success to the confidence I’ve received from our senior leaders, giving me such an important responsibility... read more
“Don is a true leader who impacts so many of our lives and careers in a positive way every day. Always insightful, inspiring and courageous. He has set the bar high — a true hall of famer.” Steve Grosso, CEO... read more