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Lease accounting:
Ready or not…the countdown is on
Deloitte poll results from April 2018
Lease accounting:
Ready or not…the countdown is on
Copyright © 2018 Deloitte Development LLC. All rights reserved. 2
Metho...
Lease accounting:
Ready or not…the countdown is on
Copyright © 2018 Deloitte Development LLC. All rights reserved. 3
Which...
Lease accounting:
Ready or not…the countdown is on
Copyright © 2018 Deloitte Development LLC. All rights reserved. 4
How p...
Lease accounting:
Ready or not…the countdown is on
Copyright © 2018 Deloitte Development LLC. All rights reserved. 5
Will ...
Lease accounting:
Ready or not…the countdown is on
Copyright © 2018 Deloitte Development LLC. All rights reserved. 6
How c...
Lease accounting:
Ready or not…the countdown is on
Copyright © 2018 Deloitte Development LLC. All rights reserved. 7
Which...
Lease accounting:
Ready or not…the countdown is on
Copyright © 2018 Deloitte Development LLC. All rights reserved. 8
Which...
Lease accounting:
Ready or not…the countdown is on
Copyright © 2018 Deloitte Development LLC. All rights reserved. 9
Which...
Lease accounting:
Ready or not…the countdown is on
Copyright © 2018 Deloitte Development LLC. All rights reserved. 10
Medi...
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarant...
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Lease accounting implementation enters final stretch

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As the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) lease accounting standards’ effective date for U.S. publicly traded companies nears on Jan. 1, 2019, executives continue to indicate concern over their organizations’ ability to comply, according to Deloitte’s fifth lease accounting online poll since the standards’ respective enactments in early 2016.

Deloitte’s April 2018 poll of more than 2,170 C-suite and other executives shows confidence is declining as those feeling unprepared to comply (29.5 percent) nearly double those feeling prepared (15.6 percent). This represents a drop from January 2018 statistics: unprepared (22.4 percent) and prepared (19 percent). Moreover, nearly one-half of executives (49.3 percent) report they are either “very” or “somewhat” concerned about implementing on time—up from 47.1 percent in May 2017.

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Lease accounting implementation enters final stretch

  1. 1. Lease accounting: Ready or not…the countdown is on Deloitte poll results from April 2018
  2. 2. Lease accounting: Ready or not…the countdown is on Copyright © 2018 Deloitte Development LLC. All rights reserved. 2 Methodology C-suite and other executives were polled online during a Deloitte Dbriefs webcast, titled “Lease accounting: Ready or not…the countdown is on,” on April 19, 2018. Most poll respondents were lessees (50.8 percent), lessors (13.5 percent) or both lessors and lessees (15.4 percent). Similar online polls were conducted in January 2018, May 2017, October 2016 and March 2016. Answer rates differed by question. Data totals for certain questions may not equal 100.0% due to the rounding of raw data to the nearest tenth of a percentage. 2,170+ 2
  3. 3. Lease accounting: Ready or not…the countdown is on Copyright © 2018 Deloitte Development LLC. All rights reserved. 3 Which best describes your organization’s likely lease accounting implementation timeline? Findings over time, C-suite and other executives Votes received: 1,320 (March 2016); 2,562 (May 2017); 2,321 (Apr. 2018) Don’t know / Not Applicable=19.6% (March 2016); 19.6% (May 2017); 18.1% (Apr. 2018) Public companies Private organizations 3.3% 22.0% 4.0% 40.3% 3.2% 42.2% Early adopt, public company Adopt on schedule, public company Mar-16 May-17 Apr-18 7.1% 48.0% 3.8% 32.3% 3.5% 33.0% Early adopt, private organization Adopt on schedule, private organization
  4. 4. Lease accounting: Ready or not…the countdown is on Copyright © 2018 Deloitte Development LLC. All rights reserved. 4 How prepared is your organization to comply with the new lease accounting standard? Findings over time, C-suite and other executives Votes received: 2,522 (Mar. 2016); 1,231 (Oct. 2016); 2,536 (May 2017); 1,659 (Jan. 2018); 2,758 (Apr. 2018) Prepared=those selecting “extremely prepared” or “very prepared” answer options. Unprepared=those selecting “not too prepared” or “not at all prepared” answer options. Don’t know / Not Applicable=12.4% (Mar. 2016); 17.9% (Oct. 2016); 15.2% (May 2017); 15.4% (Jan. 2018); 14.2% (Apr. 2018) 15.6%19.0% 11.4%11.0% 7.9% 40.8% 43.1% 42.0% 36.2% 36.1% 29.5% 22.4% 31.4%34.9% 43.6% Apr-18Jan-18May-17Oct-16Mar-16 Prepared Somewhat prepared Unprepared
  5. 5. Lease accounting: Ready or not…the countdown is on Copyright © 2018 Deloitte Development LLC. All rights reserved. 5 Will the FASB’s proposed technical improvements to ASC 842 ease your company’s implementation efforts? April 2018 findings, C-suite and other executives Votes received: 2,744 Yes, 35.9% No, 11.2% Don't know/Not applicable, 32.4% Unaffected by the technical improvements, 20.4%
  6. 6. Lease accounting: Ready or not…the countdown is on Copyright © 2018 Deloitte Development LLC. All rights reserved. 6 How concerned are you about your organization’s ability to implement the new lease accounting standard by the chosen or required date? Findings over time, C-suite and other executives Votes received: 2,531 (May 2017); 2,677 (Apr. 2018) Don’t know / Not Applicable=13.5% (May 2017); 12.5% (Apr. 2018) 7.2% 42.1% 38.2% 5.8% 41.3% 39.4% Very concerned Somewhat concerned Not concerned Apr-18 May-17
  7. 7. Lease accounting: Ready or not…the countdown is on Copyright © 2018 Deloitte Development LLC. All rights reserved. 7 Which best describes the current status of your organization’s lease accounting technology solution implementation? April 2018 findings, C-suite and other executives Votes received: 2,519 Don’t know / Not Applicable = 34.1% 28.5% 18.3% 15.2% 3.9% Using the prior leasing system with little or no modification Initial stages for a new technology solution (e.g., selecting or negotiating with vendor) New technology solution implementation underway New technology solution implementation substantially complete
  8. 8. Lease accounting: Ready or not…the countdown is on Copyright © 2018 Deloitte Development LLC. All rights reserved. 8 Which of the following poses the greatest challenge to your organization’s ability to collect lease data in a centralized, electronic inventory for lease accounting implementation? April 2018 findings, C-suite and other executives Votes received: 2,174 Don’t know / Not Applicable = 23.1% 38.4% 27.4% 11.1% Time needed to implement new leasing standard Difficulty in engaging the different constituencies within the organization Difficulty in finding a comprehensive IT solution
  9. 9. Lease accounting: Ready or not…the countdown is on Copyright © 2018 Deloitte Development LLC. All rights reserved. 9 Which best describes your organization? April 2018 findings, C-suite and other executives Votes received: 2,630 Primarily a lessee, 50.8% Primarily a lessor, 13.5% Both lessee and lessor, 15.4% Auditor, 3.8% User, 6.0% None of the above, 10.6%
  10. 10. Lease accounting: Ready or not…the countdown is on Copyright © 2018 Deloitte Development LLC. All rights reserved. 10 Media contact Shelley Pfaendler Public Relations Deloitte Services LP spfaendler@deloitte.com Dan Mucisko Public Relations Deloitte Services LP dmucisko@deloitte.com Full press release available on Deloitte.com 8
  11. 11. 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 © 2018 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.

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