The new standards on lease accounting are here. Whether a company reports under IFRS or under US GAAP, the standards became effective 1 January 2019 for calendar year-end companies.
But our survey of companies around the world reveals that some will not have fully completed their implementation programs by the effective date and so will now be relying on interim solutions to enable compliance workarounds. Some organizations have something of a grace period if they have a non-calendar year-end or are a non-public business entity that applies US GAAP – but nevertheless with systems implementation alone likely to take 4-6 months or longer, many of these companies will also be facing a race against time. The survey presents the latest picture just prior to the effective date, and the variations by region across the world.
- While under half (44 percent) had completed a lease inventory, only a quarter had completed an accounting assessment.
- Although nearly half (45 percent) had selected their lease accounting software, only 16 percent had developed the system requirements and just 13 percent had designed their software solution.
- 83 percent of companies had not yet completed the data gathering and validation step.
- Overall, just 3 percent of companies had fully completed their lease accounting compliance projects. Of the remainder, over two thirds (67 percent) indicated that they were not on track due to challenges they were facing.