The new IFRS 16 / ASC 842 / AASB 16 lease accounting standards are here. KPMG’s latest survey* reveals that new lease accounting standards present a set of challenges for companies all over the world. When implementing lease accounting standards, many companies face risks of not completing projects on time and within budget. As KPMG’s survey shows, the expected cost of lease accounting projects are increasing. Despite the deadlines, companies still have significant work to do in order to prepare for the compliance.
About the survey
KPMG International conducted a “2018 Global Lease Accounting Survey” to examine key challenges companies are facing while preparing for IFRS 16 and ASC 842 lease accounting standards compliance. More than 800 companies across the world were surveyed, both public and private companies were included. Around 41 percent of respondents report under IFRS 16 and 48 percent report under US GAAP.
The key findings:
- Only 3 percent of companies had fully completed their lease accounting compliance projects.
- 83 percent of companies are still in the process of data gathering and validation.
- 44 percent of companies already completed their lease inventorization process, but only a quarter completed an accounting assessment.
- 45 percent had already selected their lease accounting software
- 3 percent describe themselves as “very dissatisfied” with the lease accounting software they selected, 10 percent as “somewhat dissatisfied”
- 62 percent of companies say that their expected total cost of implementing lease accounting standards increased over the past 12 months*
- 67 percent stated that they were not on track due to the challenges they are facing.
Perhaps these challenges are yours as well? Check this infographic to learn how your business is doing compared to overall industry: