Material Impacts to Balance Sheets – 76% of the Top 100 reported that there will be a material impact resulting from the transfer of most right-of-use assets and liabilities on to corporate balance sheets. Another 20% are still analyzing the potential impacts of the new standard. Only 8% provided quantitative estimates of the material impact to the balance sheet, which ranged from $1.2 billion to $13 billion.
Impacts to Income Statement – 28% of the Top 100 reported that there will not be a material impact to their income statement from ASC 842. Another 66% are still analyzing the impacts.
New Policies and Controls – 18% are evaluating or implementing new policies and controls to support the standard.
Lease Accounting Software – 18% are evaluating or have selected a lease accounting software application.
Project Teams – Only 13% indicated that a project team had been formed to address the new standard.
“As expected, the SAB 74 disclosures confirm that most companies are expecting a material impact to their balance sheets when they adopt ASC 842 and IFRS 16,” said Michael Keeler, CEO of LeaseAccelerator. “However, the lack of implementation progress suggests there is still a long road to compliance for many large lessees, each of which will need to implement new Enterprise Lease Accounting systems, policies and controls.”
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