Survey of CPA Firm Auditors Show Readiness for Lease Standard
A LeaseCrunch survey of auditors from 21 CPA firms in early 2021 revealed that just over half of their GASB and non-public FASB clients had completed implementing the new lease accounting standard GASB 87, with 41% not finished, 48% not adopting early implementation, key challenges including incremental borrowing rates and lease terms, 22% lacking completed lease inventories, and over 80% affected by COVID-19, highlighting the complexity CPA firms face in helping clients transition to treating all leases as finance leases impacting financial statements.
A survey of auditors at CPA firms conducted by LeaseCrunch, a cloud-based lease accounting software company, finds that only a little over half of their GASB and non-public FASB clients have completed implementation of the new lease accounting standard, GASB 87.
Key findings from the survey:
- 41 percent have not completed implementation of GASB 87.
- 48 percent will not adopt early implementation of the new lease standard.
- Incremental borrowing rates (50%), lease terms (28%), and fair values and effective lives (9%) are the three top problems facing filers.
- 22 percent have not completed their lease inventory.
- Over 80% had their clients’ leases affected by COVID-19.
“CPA Firms are playing a critical role in helping companies meet the new lease accounting rules, particularly due to the level of complexity and changes,” said LeaseCrunch CEO Ane Ohm.
For instance, what previously might have been considered operating or capital leases will now all be treated as finance leases, which is similar to a capital lease. For what was previously classified as an operating lease, this will have an effect on the Statement of Financial Position and balance sheet.”
LeaseCrunch has helpful tools for CPA Firms to assist clients with implementing the new standard, including this GASB 62 to GASB 87 side-by-side financial statement impact guide. For more resources to help with implementation, visit www.leasecrunch.com.
About the survey
Auditors from 21 different CPA firms were surveyed during the months of March and April 2021.