Just a quarter of executives in US public companies report that their implementation of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board’s new lease accounting standards is complete, according to a poll from professional services firm Deloitte.
The firm surveyed more 1,230 public and private company C-suite and other executives on their experiences of the leasing standards within their organisation in an online poll conducted in June.
Sean Torr, Deloitte risk and financial advisory managing director, Deloitte & Touche (pictured), said: “Most of our US public company clients have completed initial compliance activities, but very few have fully completed their broader lease implementation efforts.
“I suspect we see a low rate of US public company executives calling implementation ‘complete,’ because they’ve realized that ongoing work is necessary to build sustainable, long-term lease accounting programs.”
Private organizations have more time as the standard-setters have delayed the implement date for the new standards for these companies, and Deloitte says early indications suggest this will be needed.
More than half of responding executives at privately held organizations with 100 or more real estate and/or equipment leases in their portfolios describe lease accounting implementation as ‘difficult’.
Mark Davis, audit and assurance partner and Deloitte private leader, warned against complacency, adding: “Just as private organizations can be large and complex, so can their lease portfolios. Even though the new, FASB-proposed extension would give US private companies an extra year to implement the standard, that does not mean they should slow their efforts or wait until next year to get started. Many private entities have a lot of hard work still to do to hit the deadline.”