Lease Accounting Standard Adoption, By Industry

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By May 25, 2018 at 10:33am

LEASE ACCOUNTING STANDARD ADOPTION, BY INDUSTRY

Has your company begun the transition to the new lease accounting standard?

Yes No
National 26% 74%
Business Services 19% 81%
Construction 47% 53%
Finance 54% 46%
Manufacturing 16% 84%
Professional Services 21% 79%
Retail/Wholesale 19% 81%
Transportation/
Public Utilities
39% 61%
Other 33% 67%

Finance leaders who reported their company has begun the transition also were asked the questions below:

As part of that transition, have you begun the diagnostic work necessary to determine the level of effort which will be required for you to be ready to adopt the new standard?

Yes, already completed Yes, started but not completed No, haven't started
National 60% 40% 0%
Business Services 92% 8% 0%
Construction 22% 78% 0%
Finance 26% 72% 2%
Manufacturing 73% 27% 0%
Professional Services 56% 44% 0%
Retail/Wholesale 96% 4% 0%
Transportation/Public Utilities 45% 55% 0%
Other 72% 28% 0%

Have you completed the following?

Written new accounting policies:

National 65%
Business Services 100%
Construction 64%
Finance 39%
Manufacturing 59%
Professional Services 45%
Retail/Wholesale 96%
Transportation/Public Utilities 47%
Other 61%

Made an inventory of, and prioritized, any systems changes which might be required:

National 64%
Business Services 90%
Construction 64%
Finance 27%
Manufacturing 47%
Professional Services 54%
Retail/Wholesale 96%
Transportation/Public Utilities 54%
Other 66%

Written new accounting procedures

National 63%
Business Services 64%
Construction 73%
Finance 24%
Manufacturing 56%
Professional Services 54%
Retail/Wholesale 93%
Transportation/Public Utilities 47%
Other 73%

Identified team members and responsibilities for completing the transition to new standard:

National 61%
Business Services 74%
Construction 29%
Finance 36%
Manufacturing 77%
Professional Services 64%
Retail/Wholesale 96%
Transportation/Public Utilities 53%
Other 40%

Developed a project plan to address all gaps emanating from the diagnostic work:

National 56%
Business Services 68%
Construction 20%
Finance 30%
Manufacturing 70%
Professional Services 58%
Retail/Wholesale 90%
Transportation/Public Utilities 43%
Other 63%

Investigated any lease or property management systems which will facilitate adoption:

National 56%
Business Services 92%
Construction 62%
Finance 40%
Manufacturing 18%
Professional Services 41%
Retail/Wholesale 95%
Transportation/Public Utilities 10%
Other 62%

Identified, at a high level, the magnitude and type of the lease inventory (e.g., property, equipment):

National 54%
Business Services 87%
Construction 9%
Finance 28%
Manufacturing 46%
Professional Services 51%
Retail/Wholesale 97%
Transportation/Public Utilities 54%
Other 42%

What is the most challenging aspect of the transition to the new standard?

National

1. Training staff
2. Diagnosing the needed changes
3. Finding professionals with the requisite experience

Business Services

1. Updating technology
2. Managing change
3. Identifying, inventorying and categorizing company’s leases

Construction

1. Diagnosing the needed changes
2. Finding professionals with the requisite expertise
3. Training staff

Finance

1. Training staff
2. Diagnosing the needed changes
3. Managing change

Manufacturing

1. Finding professionals with the requisite expertise
2. Managing change
3. Diagnosing the needed changes

Professional Services

1. Identifying, inventorying and categorizing company’s leases
2. Updating technology
3. Diagnosing the needed changes

Retail/Wholesale

1. Training staff
2. Managing change
3. Updating technology

Transportation/Public Utilities

1. Updating technology
2. Managing change
3. Diagnosing the needed changes

Other

1. Finding professionals with the requisite expertise
2. Diagnosing the needed changes
3. Identifying, inventorying and categorizing company’s leases

For your company, which new accounting standard has been more challenging to adopt?

Revenue recognition Lease accounting
National 72% 28%
Business Services 80% 21%
Construction 61% 39%
Finance 78% 23%
Manufacturing 55% 45%
Professional Services 68% 32%
Retail/Wholesale 80% 20%
Transportation/
Public Utilities
76% 24%
Other 71% 29%

How much of the processes and learnings from transitioning to the new revenue recognition standard have you been able to apply to adopting the new lease accounting standard?

Most of them Some of them Almost none of them
National 25% 61% 15%
Business Services 9% 91% 0%
Construction 12% 61% 28%
Finance 20% 76% 4%
Manufacturing 11% 67% 23%
Professional Services 19% 52% 29%
Retail/Wholesale 40% 53% 7%
Transportation/Public Utilities 42% 57% 1%
Other 34% 46% 20%

Source: Robert Half and Protiviti survey of more than 270 finance leaders in Canada; totals may not equal 100 per cent due to rounding

© 2018 Robert Half International Inc.