Lease accounting is here: Are you ready? | KPMG Singapore
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Lease accounting is here: Are you ready?

Lease accounting is here: Are you ready?

New Global lease accounting survey examined the key challenges businesses were and may still be facing in implementing the new standards.

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The new standard on leases, International Financial Reporting Standard (IFRS) 16, has been effective since 1 January 2019. Calendar year-end companies are expected to comply by December 2019. The new standard is likely to have significant impact for all companies as lessees. The new requirements will impact not only the accounting and financial reporting by companies, but also their systems, processes, internal controls, procurement, taxes, and operational functions.

In September 2018, KPMG International conducted a global survey to assess where companies are on their implementation journey and key challenges faced during implementation. KPMG International’s latest Global Lease Accounting Survey report, Lease Accounting is here: Are you ready?, presents the latest picture prior to the effective date and the variations by region across the world. Many companies surveyed still have work to do even after the effective date of the standard. Those companies that did not fully complete implementation by the effective date will have to rely on interim solutions, while some that have a little bit of a grace period left are still facing a race against time.


Key findings:

  • While under half (44 per cent) had completed a lease inventory, only a quarter had completed an accounting assessment.
  • Although nearly half (45 per cent) had selected their lease accounting software, only 16 per cent had developed the system requirements and just 13 per cent had designed their software solution.
  • 83 per cent of companies had not yet completed the data gathering and validation step.
  • Overall, just three per cent of companies had fully completed their lease accounting compliance projects. Of the remainder, over two-thirds (67 per cent) indicated that they were not on track due to challenges they are facing.

We hope you find the report provides valuable insights that can help you benchmark against your peers.

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