By Michael Cohn / Accounting Today
The lease accounting standard that public companies are gearing up to comply with by the end of the year is presenting them with some technology obstacles, according to a new report from Big Four firm Deloitte.
The challenges include new data elements, data housed in various systems, relevant information being spread across multiple lease agreements, a high volume of data fields, and multiple languages, contracting parties and currencies. In many cases, the lease agreements aren’t in electronic format, and there’s often a lack of in-house resources to deal with the new standard.
“We are definitely seeing that companies are not fully prepared for implementing the lease standard,” said Jeanne McGovern, an audit and assurance partner at Deloitte. “They’re seeing a number of key challenges in terms of operationalizing this, surrounding data collection and working through any system, either modifications or implementing a new system. At this point, the challenge is that the time is running very short to be able to execute and be in compliance by Jan. 1, 2019.”
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