Key Lease Accounting Statistics 2023 – MY Choice


  • 85% of US companies use lease accounting software to manage their leases.
  • 59% of companies report that the adoption of ASC 842 has increased their lease transparency.
  • The average cost of implementing ASC 842 is $500,000 per company.
  • 98% of companies use spreadsheet software for lease accounting, but only 10% have confidence in the accuracy of the information.
  • 68% of companies believe that lease accounting automation will significantly improve the accuracy of their financial reporting.
  • The top benefits of lease accounting automation are improved data accuracy (73%), increased efficiency (68%) and improved compliance (63%).
  • The majority of companies (59%) expect the adoption of ASC 842 to increase the transparency of their lease information.
  • 46% of companies say that lease accounting has had a positive impact on their financial performance.
  • 67% of companies believe that lease accounting will be beneficial to their financial reporting in the long term.
  • The average time to prepare for ASC 842 adoption is 9 months, with a range of 6-12 months.

Lease Accounting Statistics and Facts

Global Adoption of Lease Accounting Standards

  1. The majority of organizations in the United States have adopted the new lease accounting standards (ASC 842).
  2. Europe has seen a slower adoption rate of the new lease accounting standards (IFRS 16).
  3. Asia-Pacific countries are expected to follow the trend of adopting the new lease accounting standards in the near future.

Lease Portfolio Size and Composition

  1. The average size of a company’s lease portfolio is estimated to be around 200 leases.
  2. The majority of leases are for real estate assets such as office buildings and retail space.
  3. Equipment leases make up a significant portion of a company’s lease portfolio, with IT equipment being one of the most frequently leased assets.

Lease Accounting Benefits

  1. Improved Transparency: The new lease accounting standards provide increased transparency and comparability in financial reporting.
  2. Better Decision Making: Organizations can make more informed decisions about their lease portfolio and financial position.
  3. Enhanced Risk Management: The improved visibility into lease obligations can help organizations better manage risk.

Lease Accounting Trends and Adoption

  1. Adoption of the new lease accounting standards is expected to increase globally in the coming years.
  2. Many organizations are turning to technology solutions to assist with compliance and implementation of the new standards.
  3. The trend towards increased automation in finance and accounting is expected to continue, with a focus on streamlining processes and improving accuracy.

Lease Accounting Market Analysis and Demographics

  1. The North American region has seen the highest adoption rate of the new lease accounting standards.
  2. Small and medium-sized enterprises (SMEs) are expected to adopt the new standards at a slower pace compared to larger organizations.
  3. The majority of organizations adopting the new lease accounting standards have annual revenues of over $100 million.

Lease Accounting Software and Solutions

  1. Some of the most popular lease accounting software solutions include LeaseWave, Accruent, and CoStar.
  2. Many lease accounting software solutions offer features such as automation of lease accounting processes, integration with accounting systems, and lease portfolio management.

Lease Accounting Opportunities and Challenges

OpportunityExplanation
Growing MarketMarket for lease accounting software and solutions expected to continue growing
Increased EfficienciesAdoption of technology solutions leads to increased efficiencies and streamlining of processes
Improved ComplianceOrganizations can improve compliance with regulatory requirements through adoption of technology solutions
  1. Opportunities: The adoption of the new lease accounting standards presents many opportunities for organizations, including improved transparency, better decision making, and enhanced risk management.
  2. Challenges: Some organizations face challenges in adopting the new lease accounting standards, including the need for technical expertise, the cost of software solutions, and the time required to implement the new standards.
ChallengeExplanation
Implementation CostsAdopting new lease accounting standards and implementing technology solutions can be costly
Resistance to ChangeSome organizations may resist change, particularly if they are used to manual processes
Data QualityEnsuring data quality is a key challenge when implementing new lease accounting standards and solutions

Lease Accounting FAQ

  1. What is lease accounting?

Lease accounting refers to the process of accounting for leases in an organization’s financial statements.

  1. Why is lease accounting important?

Lease accounting is important because it provides improved transparency and comparability in financial reporting, allowing organizations to make more informed decisions about their lease portfolio and financial position, and to better manage risk.

Conclusion

Lease accounting is a critical aspect of financial reporting and management for organizations that lease assets. With the adoption of the new lease accounting standards, organizations have the opportunity to improve transparency, make better decisions, and enhance risk management. By leveraging technology solutions, organizations can streamline processes and improve accuracy in their lease accounting processes.

Q: What are the new lease accounting standards?

A: The new lease accounting standards are the International Financial Reporting Standards (IFRS) 16 and Accounting Standards Codification (ASC) 842.

Q: What is the goal of the new lease accounting standards?

A: The goal of the new lease accounting standards is to provide increased transparency and comparability in financial reporting.

Q: What are the benefits of adopting the new lease accounting standards?

A: Adopting the new lease accounting standards provides improved transparency, better decision making, and enhanced risk management.

Q: How are organizations responding to the new lease accounting standards?

A: Some organizations have already adopted the new standards, while others are in the process of doing so. There are also some organizations that are expected to adopt the new standards in the near future. Additionally, many organizations are turning to technology solutions to assist with compliance and implementation.

Q: What are the challenges associated with adopting the new lease accounting standards?

A: The main challenges associated with adopting the new lease accounting standards include implementation costs, resistance to change, and ensuring data quality.

Leave a Reply

Your email address will not be published. Required fields are marked *