Accounting & Tax

A Closer Look: Lease Accounting Implementation Update

Many companies are waking up to the fact that they are less than six quarters away from the effective date of the new lease accounting standard, Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). A calendar year public entity presenting three year comparative financial statements that adopts the new standard as of the effective date (January 1, 2019) is required to report (in 2019) as if the standard had been adopted effective January 1, 2017 (the earliest comparative period presented).

In a recent study by PricewaterhouseCoopers and CBRE Group, approximately 25% of over 600 finance executives stated their companies have not yet begun the process of implementing the new lease guidance. Over half of the study participants stated they were assessing the impacts of the new rules, and about 25% said they had started implementation.