2018 accounting change survey results

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How companies are coping with the recent wave of accounting changes

First it was revenue recognition (ASC 606 & IFRS 15). Then came lease accounting (ASC 842 & IFRS 16), followed by new hedge accounting guidance -- just to name a few of the recent new standards. To find out how companies are coping with the unprecedented wave of accounting changes, we surveyed finance executives about their revenue recognition, leasing and hedge accounting transition experiences. Highlights are summarized below. See our accounting change survey data explorer to take a deeper dive and analyze the results based on industry, company size and other variables. 

Revenue recognition: not over yet

One-third of public company respondents were still at work implementing the new revenue recognition standards, which included non-calendar year end companies and those doing post-effective date work. Meanwhile 57% of non-public respondents were not yet done assessing the impact. One-third of public company respondents reported having six or more full-time equivalents focused on implementing revenue recognition, with 15% having teams of more than 10 people. Implementation costs are noted in the chart.

Explore more revenue recognition survey results


Lease accounting: private companies getting started

More than half of public company respondents expect to make significant system changes to implement the new lease accounting standards, increasing to:

  • 63% for public respondents with more than $1 billion in revenue, and
  • 73% overall for respondents with more than 1,000 leased assets.

Of the public companies making significant changes, nearly one-third were unsure or did not think they would go live with their system changes by the effective date of the new standard. Meanwhile, non-public companies that have until 2020 to comply with the new lease accounting standards are just getting started (see chart). Of those still working on their assessments, 83% are less than 50% complete.

Explore more lease accounting survey results


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Video: Lease accounting change progress update.

Faster start adopting new hedging standard

The hedge accounting changes, while generally less impactful, came fast on the heels of revenue recognition and leasing. Still, the majority of survey respondents who use hedging have already adopted the new accounting guidance or plan to this year. More than half also expect their hedging strategy to change in some way -- such as increasing their use of hedging or applying hedge accounting to additional risk management strategies. 



Additional survey highlights

  • 18% of respondents expect to make system changes relating to revenue recognition, while 10% were unsure.
  • 2/3 of respondents reported lease accounting implementation teams of 3+ full-time equivalents, increasing to 84% for those beyond assessing the impact.
  • 46% of public company respondents believe leasing implementation costs will exceed $500,000.
  • 70%+ of public company respondents rated identifying lease population, data abstraction and human capital/resource requirements as somewhat or very difficult making them among the biggest leasing implementation challenges.
  • 95% of public company respondents (vs. 77% for non-public) said adopting the recent accounting changes was somewhat or very difficult

About this survey

  • Responses were collected using an open online survey during late April and early May 2018.
  • More than 600 finance professionals participated from a range of industries, with a majority (53%) coming from the industrial products/manufacturing, financial services and technology/media/telecommunications sectors.
  • 82% reported their title as CFO, controller or finance/accounting director or manager.
  • 69% were from public companies.
  • 93% were US GAAP reporters.
  • 57% were from companies with revenue of $1 billion or more

Contact us

Chad Kokenge
Partner, PwC Deals, PwC US
Tel: +1 (646) 818 7795

Shane Foley
Principal, Digital Risk Solutions, PwC US
Tel: +1 (646) 471 0516

Robert Bishop
Consumer and Industrial Products & Services Finance Leader, PwC US
Tel: +1 (312) 298 2037

Brad White
Partner, Accounting Method and Fixed Asset Services Leader, PwC US
Tel: +1 (213) 356 6148

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