LeaseAccelerator survey of over 60 senior finance professionals finds AASB 16 is proving more challenging than revenue recognition standard AASB 15, with one-third of companies struggling to meet next month’s deadline.
June 18th, 2019 (Sydney): LeaseAccelerator, the pioneer in the Enterprise Lease Accounting software market, has surveyed the market and discovered almost one-third of companies are behind schedule or have not started projects to meet the July 1 deadline.
In a survey conducted with over 60 senior finance professionals (VP or C-suite level), LeaseAccelerator looked at the readiness of Australian firms for the new lease accounting reporting regime, as well as the key issues companies are grappling with. VP Solution Consulting ANZ and South East Asia, Michelle Laybutt, said local organisations were encountering similar challenges to their international counterparts but had learned some lessons from the earlier implementations overseas.
“Almost 85% of respondents said the project had turned out to be more complex than they anticipated and 61% are finding the project more complex than the new revenue recognition standard AASB 15,” she said. “It’s heartening to see though, that Australians generally indicate a slightly higher level of confidence in meeting the deadline compared to the US and UK, whose deadlines were six months ago. I think we’ve taken the ‘last mover advantage’ here and learned from the international experience.”
Despite this, almost one-third of firms were in danger of being unable to meet the July 1 deadline for reporting, leaving them open to difficulties with ongoing AASB 16 compliance.
“The strong lesson we have learned from UK and US companies is that day one is just the first step – not the end point,” Ms Laybutt said. “These reporting requirements need to become a fundamental part of business-as-usual or companies will find themselves in the same tangle every reporting cycle. It’s a very profound change that involves multiple business areas including IT, Treasury, Finance and Procurement, and while companies may be ready to submit those initial reports, it’s the day two and beyond where we have seen them having to take a second look.”
Data collection has been the biggest challenge for local companies (55%), with IT, lease and equipment leases proving most difficult (50%). Twice as many companies plan to purchase a new specialised lease accounting software package (35%) as compared to using their existing ERP (16%) to comply with AASB 16. Download the full report here.
LeaseAccelerator offers the market-leading SaaS solution for Enterprise Lease Accounting, enabling compliance with the current and new lease accounting standards. Using LeaseAccelerator’s proprietary Global Lease Accounting Engine, customers can apply the new standards to all categories of leases including real estate, fleet, IT and other equipment at an asset-level. On average, LeaseAccelerator’s Lease Sourcing and Management applications generate savings of 17 percent on equipment leasing costs with smarter procurement and end-of-term management. Learn more at http://www.leaseaccelerator.com.au.
For more information and interviews with Michelle Laybutt:
Kristin Westlake, The Continuum Partners
+61 416 219 358