Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Just One-Quarter of Public Company Executives Call Lease Accounting Implementation ‘Complete’

230 views

Published on

According to a June 2019 Deloitte poll, just 26.3% of public company executives report that their implementation of FASB and IASB lease accounting standards is complete. Many have completed initial compliance activities, but few have fully completed broader lease implementation efforts.

Published in: Government & Nonprofit
  • Be the first to comment

  • Be the first to like this

Just One-Quarter of Public Company Executives Call Lease Accounting Implementation ‘Complete’

  1. 1. New lease accounting standards: Lessons learned from public companies Deloitte poll results from June 20, 2019
  2. 2. New lease accounting standards: Lessons learned from public companiesCopyright © 2019 Deloitte Development LLC. All rights reserved. 2 Methodology C-suite and other executives from public and privately held organizations were polled online during a Dbriefs webcast, titled “New lease accounting standards: Lessons learned from public companies” and involving the Deloitte Center for Controllership, on June 20, 2019. Similar online polls were conducted in February 2019, October 2018, April 2018, January 2018, May 2017, October 2016 and March 2016. Answer rates differed by question and respondents differed by webcast poll. In some instances, immaterial amounts (e.g., +/- 0.1%) have been added to or removed from the “Don’t know/not applicable” answer responses to bring results to 100% total for each question. 1,230+ 2
  3. 3. New lease accounting standards: Lessons learned from public companiesCopyright © 2019 Deloitte Development LLC. All rights reserved. 3 How prepared is your organization to comply with the new lease accounting standard? Findings over time; C-suite and other executives only Votes received: 946 (292 public, 654 private; Oct 2016); 1,976 (1,086 public, 890 private; May 2017); 1,838 (1,021 public, 817 private; Apr 2018); 1,367 (829 public, 538 private; Oct 2018); 1,322 (729 public, 593 private; Feb 2019); 1,792 (456 public, 1,336 private; June 2019) Prepared = Respondents selecting “extremely prepared” or “very prepared” answer options. Unprepared = Respondents selecting “not too prepared” or “not at all prepared” answer options. Don’t Know / Not Applicable = 5.2% public and 6.3% private (Oct 2016); 4.6% public and 4% private (May 2017); 3% public and 4.5% private (Apr 2018); 3.2% public and 3% private (Oct 2018); 1.8% public and 6.1% private (Feb 2019); 19.7% public and 10.3% private (June 2019) Prepared Somewhat prepared Unprepared Public companies Private organizations 44.8% 44.2% 45.2% 36.1% 33.2% 37.4% 41.1% 45.3% 41.4% 44.4% 43.8% 39.7% 7.8% 6.5% 8.9% 16.5% 16.9% 12.6% Oct-16 May-17 Apr-18 Oct-18 Feb-19 Jun-19 26.7% 26.4% 21.4% 9.4% 6.8% 8.1% 45.5% 51.2% 52.6% 41.9% 30.6% 29.0% 22.6% 17.8% 23.0% 45.5% 60.7% 43.2% Oct-16 May-17 Apr-18 Oct-18 Feb-19 Jun-19
  4. 4. New lease accounting standards: Lessons learned from public companiesCopyright © 2019 Deloitte Development LLC. All rights reserved. 4 Which do you think will pose the largest implementation challenge for your company’s lease accounting standard compliance efforts in the next 12 months? Don’t know / Not Applicable = 25.5% public and 12.9% private (June 2019) C-suite and other executive findings Votes received: 1,942 (509 public, 1,433 private; June 2019) 29.7% 14.9% 16.7% 5.9% 7.3% 43.7% 17.9% 13.2% 6.8% 5.5% Public companies Private organizations Identifying all leases and gathering necessary data Managing multiple new accounting standards (e.g., revenue recognition and/or current expected credit loss) in addition to lease accounting Managing necessary changes to business processes, controls, and employee/stakeholder communications Difficulty in finding and implementing an appropriate IT solution Figuring out where to start the implementation process
  5. 5. New lease accounting standards: Lessons learned from public companiesCopyright © 2019 Deloitte Development LLC. All rights reserved. 5 How many real estate and/or equipment leased assets does your organization’s portfolio contain? Don’t know / Not Applicable = 18.5% public and 10.7% private (June 2019) C-suite and other executive findings Votes received: 1,445 (339 public, 1,106 private; June 2019) 25.7% 14.2% 14.2% 8.8% 18.6% 62.1% 11.7% 9.0% 3.0% 3.5% Less than 100 100-300 301-1,000 1,001-2,500 More than 2,500 Public companies Private organizations
  6. 6. New lease accounting standards: Lessons learned from public companiesCopyright © 2019 Deloitte Development LLC. All rights reserved. 6 How easy or difficult do you think it will be for your company to implement the new lease accounting standard? Don’t Know = 10.4% public and 10.8% private (June 2019) C-suite and other executive findings Votes received: 1,982 (518 public, 1,464 private; June 2019) 7.1% 23.2% 33.0% 26.3% 8.3% 36.9% 38.2% 5.8% Easy Neither difficult nor easy Difficult Not applicable- implementation already complete Public companies Private organizations
  7. 7. New lease accounting standards: Lessons learned from public companiesCopyright © 2019 Deloitte Development LLC. All rights reserved. 7 Ease of implementation for publics and privates by lease portfolio size Don’t Know = Less than 100: 6% public, 8.3% private; 100-300: 2.1% public, 4.1% private; 301-1,000: 0% public, 1.1% private; 1,001-2,500: 0% public, 6.3% private; More than 2,500: 1.8% public, 2.7% private C-suite and other executive findings, “How easy or difficult do you think it will be for your company to implement the new lease accounting standard?” cross- referenced with “How many real estate and/or equipment leased assets does your organization’s portfolio contain?” Votes received: 1,233 (264 public, 969 private; June 2019) 25.0% 5.2% 22.9% 3.1% 26.1% 2.0% 25.0% 3.1% 31.0% 2.6% 22.6% 36.7% 45.8% 53.5% 52.2% 58.6% 42.9% 78.1% 37.9% 68.4% 34.5% 40.3% 22.9% 35.4% 21.7% 34.3% 32.1% 9.4% 22.4% 23.7% 11.9% 9.5% 6.3% 3.9% 4.0% 3.1% 6.9% 2.6% Public companies Privately held organizations Public companies Privately held organizations Public companies Privately held organizations Public companies Privately held organizations Public companies Privately held organizations Less than 100 100-300 301-1,000 1,001-2,500 More than 2,500 Easy Neither difficult nor easy Difficult Not applicable—implementation already complete
  8. 8. New lease accounting standards: Lessons learned from public companiesCopyright © 2019 Deloitte Development LLC. All rights reserved. 8 Media contact Shelley Pfaendler Public Relations Deloitte Services LP spfaendler@deloitte.com Cheznee Johnson Public Relations Deloitte Services LP chezjohnson@deloitte.com Full press release available on Deloitte.com 8
  9. 9. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms. Copyright © 2019 Deloitte Development LLC. All rights reserved. The statements in this report reflect the aggregation of poll responses and are not intended to reflect facts or opinions of any entities. All data, charts and statistics referenced and presented, as well as the representations made and opinions expressed, unless specifically described otherwise, pertain only to the participants and their responses to the Deloitte poll. The information obtained during the poll was taken “as is” and was not validated or confirmed by Deloitte. This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.

×