October 26, 2018 — With the effective date of the new lease accounting standards less than two months away for many companies, Encoursa, in partnership with LeaseQuery, conducted a survey to understand the progress accountants are making towards adoption.
“The survey results confirm what our team is seeing in the marketplace,” said George Azih, CPA, founder and chief executive officer at LeaseQuery. “Many companies are going to be behind the eight-ball if they delay their implementation projects any longer.”
Progress Towards Adoption
The compliance deadlines are January 1, 2019 for calendar-year public companies and January 1, 2020 for calendar-year private companies. As expected, the survey found that public companies are farthest along in adoption. Yet, only 43% are in the final implementation stage of deploying a tool and migrating data. The findings indicate a significant amount of work remains before public companies are ready to comply.
Compared to public companies, private companies are taking full advantage of the extra time to comply: 44% are in the early stages of assessing their implementation plan.
Challenging Elements of Adoption
When asked about the most challenging elements of adoption, accountants ranked understanding the new standards as the biggest challenge, which speaks to their complexity. As such, seven out of ten public companies are selecting lease accounting software as their tool of choice.
Almost half of the companies surveyed will implement the new standards with fewer than 1-2 team members. With a lean approach, smartly harnessing technology will go a long way in ensuring an effective and efficient transition.
Download the report here.