Accounting EZLease

Lease Accounting Adoption: Market Snapshot

Sponsored by EZLease

EZLease surveyed FASB and GASB organizations about lease accounting challenges and compliance plans. With the deadlines approaching, this data will help you evaluate where you stand relative to your peers.


In November, the FASB met to consider yet another potential delay to the deadline for ASC 842 lease accounting compliance, and (unsurprisingly) their response was an unequivocal message to the market that this is it….no more delays, and no more excuses. So, as you start to consider (or reconsider) your plans for adoption, we thought it would be helpful to summarize and share some ‘hot off the press’ data on where your peers stand on implementation.

At the recent EZLease GASB 87 and ASC 842 Virtual Summits, we asked the participants about their lease portfolios, compliance challenges and plans for achieving compliance with the standards. We also heard from them on their resources, closing concerns and key stakeholders. The results show that most organizations have work to do to meet the deadlines, so you’re not alone if you haven’t started.

First, a few details about our GASB 87 participants:

  • Most have smaller lease portfolios of under 100 leases (71%) and less than $50M (69%)
  • They are both lessees and lessors (63%)
  • They lease a mix of equipment and real estate (47%)

The ASC 842 Summit had a very similar profile, although a much lower percentage said they were lessors.

  • Most have smaller lease portfolios of under 100 leases (75%) and less than $50M (67%)
  • They are mainly lessees (58%)
  • They also lease a mix of equipment and real estate (47%)


According to the participants, the main challenges that lease accounting introduces into the close process are completeness and accuracy, with the GASB 87 audience slightly more concerned about completeness than the ASC 842 audience. These concerns make sense, given how distributed leases usually are across the organization. And, with the delays in the GASB 87 deadlines (and maybe a glimmer of hope for more delays), many of those organizations haven’t started the work to track down their leases, so they don’t know how complete their information is. Concern about resources is a close third in closing process challenges – most accounting teams are already busy and complying with the lease accounting standards is generally incremental work.

Compliance plans

While the deadlines are different between GASB and FASB organizations, organizations that fall under each standard say they have very similar adoption plans. The same percentage (24%) haven’t started their lease accounting compliance projects yet. Nearly the same percentage (37% for GASB and 38% for FASB) say they are in the planning phase. However, there are two major differences:

  • More GASB organizations are in the middle of implementing the standard (24%) than the FASB organizations (14%).
  • Only 7% of GASB organizations say that they’ve completed implementing the standard compared to 17% of FASB organizations who are already compliant. GASB organizations are more likely to have a mix of lessee and lessor relationships which may delay their compliance project.

Project timeline expectations

We asked our participants how long they expected their lease accounting projects to take. Overall, the FASB participants were more optimistic about the timeline:

  • Only 16% of the GASB participants expect their project to take two months or less versus nearly a third of the FASB audience (32%). It’s likely that private companies may have a combination of larger teams, better information about their leases, and better access to internal expertise.
  • 21% of the GASB participants and 31% of the FASB ones are giving themselves 2-4 months.
  • 25% of the GASB participants and 19% of the FASB ones expect 4-6 months.
  • 39% of the GASB participants and 19% of the FASB ones say longer than 6 months. As above, the GASB organizations are likely to have smaller teams and less information about their lease portfolio which create uncertainty and add cycle time to the project timeline.

Start your compliance journey

You can see from this data that you’re in good company if you haven’t started your compliance project – but it doesn’t mean that’s the right place to be!  When the industry went through the same cycle with public companies in 2019, there was similar procrastination. When asked now what their biggest regret was, most public companies agree that they should have started earlier. As you do your planning, it’s important to consider the time it takes to gather, abstract, validate, and attest your lease data, no matter what system you choose. The upfront preparation can take more time than you think.

Most organizations don’t have deep lease accounting expertise so it’s important to look for lease accounting software that incorporates the requirements of the standards already. Although it’s tempting to start out with spreadsheets, once you have over 5 or 10 leases, it’s too hard to continue. Spreadsheets don’t have any audit trail, validation, or reporting, putting your audits at risk. Automating the process with software that has built-in knowledge of and calculations for the standard can help address the resource constraints you face. And, you can choose to work with vendors who can take over the lease accounting process for you.

This data shows that your peers are starting to take action to get compliant. To see how your lease portfolio will look in lease accounting software, look for ways to test the product using free trials and accounting examples before you commit to a long-term contract. If you are managing lease accounting as both lessee and lessor, it’s important to consider a software application that can handle both. With the right tool, no matter what timeline you’re on or close process you follow, complying with the lease accounting standards will be much easier now and in the long-term.