Getting ready to adopt the new leasing standard? In this episode, PwC leasing specialists discuss overall readiness, new standard setting on transition elections and practical expedients, implementation challenges and best practices.
The new leases standard will impact companies across all industries, and the effective date is quickly approaching. The new standard will impact both lessees and lessors.
Based on an October 2018 survey, companies span the spectrum in terms of readiness, with about 76% of companies more than halfway done with their implementation. About 25% of respondents indicated they had concerns with their ability to “go-live” with system changes for a variety of reasons
Recent standard setting have added transition options to ease the transition to the new leases standard. We expect many companies will elect the option to not restate prior periods. In general, electing this transition method (i.e., to not restate prior periods), will not impact which other practical expedients a company may elect (e.g., the package of practical expedients).
We also discuss the package of practical expedients, including reminders about what rate a lessee should use to discount its lease payments in calculating its lease liability. As the effective date approaches, companies also need to remember the need to consider the status and effectiveness of controls around both manual and automated processes.
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