Industry grappling with AASB 16 readiness but taking ‘last mover advantage’

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.

(SYDNEY–(BUSINESS WIRE)–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 at <link>.

About LeaseAccelerator:
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.

Contacts

For more information and interviews with Michelle Laybutt:
Kristin
Westlake, The Continuum Partners
kwestlake@thecontinuumpartners.com
/ +61 416 219 358