Recent SEC disclosures stress balance sheet impact of new lease accounting standards

Preliminary SAB 74 disclosures reveal materiality of ASC 842 changes

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Apr 17, 2018, 09:00 ET

RESTON, Va., April 17, 2018 /PRNewswire/ -- LeaseAccelerator, the pioneer of the Enterprise Lease Accounting software category, announced today the release of the first SAB 74 Disclosure Analysis for Lease Accounting report, an assessment of recent SEC filings related to the adoption of ASC 842. The report includes comments issued by the 100 US companies with the largest dollar value of leasing obligations. Key findings include:

New Lease Accounting Standards (ASC 842 and IFRS 16)

Material Impacts to Balance Sheets – 76% of the Top 100 reported that there will be a material impact resulting from the transfer of most right-of-use assets and liabilities on to corporate balance sheets. Another 20% are still analyzing the potential impacts of the new standard. Only 8% provided quantitative estimates of the material impact to the balance sheet, which ranged from $1.2 billion to $13 billion.
Impacts to Income Statement – 28% of the Top 100 reported that there will not be a material impact to their income statement from ASC 842. Another 66% are still analyzing the impacts.
New Policies and Controls - 18% are evaluating or implementing new policies and controls to support the standard.
Lease Accounting Software - 18% are evaluating or have selected a lease accounting software application.
Project Teams - Only 13% indicated that a project team had been formed to address the new standard.

"As expected, the SAB 74 disclosures confirm that most companies are expecting a material impact to their balance sheets when they adopt ASC 842 and IFRS 16," said Michael Keeler, CEO of LeaseAccelerator. "However, the lack of implementation progress suggests there is still a long road to compliance for many large lessees, each of which will need to implement new Enterprise Lease Accounting systems, policies and controls."

The report is accessible at:
https://www.leaseaccelerator.com/lease-accounting-sab-74-disclosures

About LeaseAccelerator
LeaseAccelerator offers the market-leading software-as-a-service (SaaS) for Enterprise Lease Accounting, proven to be the simplest, fastest, easiest path to compliance with the new FASB and IFRS standards. Using LeaseAccelerator's unique Global Lease Accounting Engine, customers can apply the new standards to all types of leases – real estate, equipment and embedded – at the asset level as specified by FASB and IASB. The company's ecosystem of certified, global partners offers a variety of guaranteed turn-key solutions. On average, the firm's Sourcing and Management applications drive savings of 17 percent with smarter procurement and end-of-term management – compliance plus ROI. Visit http://www.leaseaccelerator.com/.

SOURCE LeaseAccelerator