Survey: Adopting New Leasing Standard More Difficult than Expected
JUN 29, 2017 - 7:42 am
According to a PricewaterhouseCoopers (PwC) survey, 23% of companies have yet to begin the initial adoption process of the new leasing standard, while 47% said they’ve started implementation, but reported the effort is more difficult than expected.
The new leasing standards from the FASB and the IASB differ in some ways, but they both require all leases to be recorded on a public company’s balance sheet starting in 2019 (or 2020 for private companies). However, companies are still getting ready for FASB and the IASB’s revenue recognition standard, which takes effect about a year earlier than the leasing standard. “I think companies are rightfully focused on revenue recognition, which is becoming effective at the beginning of next year,” said Sheri Wyatt, a partner in PwC’s Capital Markets & Accounting Advisory Services practice.
According to PwC, 74% of companies are expecting systems changes, and more than half indicated they will implement or develop a new solution. However, only 23% said they have already selected a leasing solution. Currently, 70% of the poll respondents indicated they are manually collecting data from lease contracts in-house to comply with the new leasing standard.