---
title: LeaseCrunch® Survey of Auditors at 77 US CPA Firms
description: LeaseCrunch® survey of auditors at 77 US CPA firms finds 58% believe that new recognition of a lease obligation will adversely affect loan covenants.
---

[Press | Crunchafi ](https://www.crunchafi.com/newsroom)

# [LeaseCrunch® Survey of Auditors at 77 US CPA Firms](https://www.crunchafi.com/newsroom/leasecrunch-survey-of-auditors-at-77-us-cpa-firms)

 Written by [LeaseCrunch®](https://www.crunchafi.com/newsroom/author/leasecrunch) | Nov 2, 2018 7:51:38 PM

MILWAUKEE, November 2, 2018 – In a survey of auditors at 77 US CPA firms conducted by LeaseCrunch®, 58% believe that the new recognition of a lease obligation will adversely affect loan covenants for their clients.

LeaseCrunch® is the only lease accounting software made by former CPA firm auditors for CPA firm auditors, with a development team made up of CPAs, former Big 4 public accounting auditors, accounting academics and a former FASB staff member. 

Questions asked on survey: 

**1) Have you started conversations with clients about meeting the new lease accounting reporting requirements?**

| Yes | 90% |
| --- | --- |
| No | 10% |

 

(Responses for CPA firms that have started conversations with clients about the new lease standard.) 

**  
Do you have any clients who are, or will be, early adopters of the new lease standard?**

| Yes, public and private | 4% |
| --- | --- |
| Yes, private only | 22% |
| Yes, public only | 1% |
| No | 72% |
| 69 | 100% |

 

**Have there been any problems with: {could select multiple responses}**

| Determining which practical expedients should be applied | 22% |
| --- | --- |
| No problems so far   | 21% |
| Book vs. tax implications     | 17% |
| Determining the incremental borrowing rate  | 14% |
| Accounting for operating leases | 11% |
| Determining the lease term   | 9% |
| Don't yet know what problems may exist  | 6% |

** **

**2) Have any clients raised the issue of potentially violating bank loan covenants when the new lease standard impacts the balance sheet?**

| Yes | 68% |
| --- | --- |
| No | 32% |

           

**3) In general, do you think that recognition of a lease obligation will adversely affect loan covenants for your clients?**

| Yes | 59% |
| --- | --- |
| No | 41% |

 

**4) Have your clients completed an inventory of their leases?**

| Yes, completed | 14% |
| --- | --- |
| Most have started | 20% |
| A few have started | 43% |
| None have started | 22% |

 

**5) For clients who completed an inventory of their leases, was the actual number of leases more or less than thought?**

| More than thought | 17% |
| --- | --- |
| Less than thought | 1% |
| What was anticipated | 48% |
| I don't know | 33% |

 

**6) Are existing controls at clients adequate to ensure identification, classification, and documentation of existing leases?**

| Yes, existing controls generally are sufficient | 32% |
| --- | --- |
| No, existing controls generally will require revision/enhancement | 45% |
| Controls generally have not been documented or tested  | 23% |

 

**7) Do you expect your clients to adopt the package of practical expedients on transition?**

| Yes, most will elect the practical expedient package  | 60% |
| --- | --- |
| No, most will elect to apply the new standard immediately  | 3% |
| Still under consideration   | 38% |

 

**8) Do you expect clients to separate lease and nonlease (e.g., service elements) components within a lease or elect the practical expedient that permits a lessee to combine lease and nonlease components to calculate the lease liability?**

| Generally expect clients to elect separate accounting and a smaller liability/obligation | 8% |
| --- | --- |
| Generally expect clients to elect the practical expedient  | 55% |
| Too soon to tell   | 38%  |

 

**9) Do you expect private clients to determine an incremental borrowing rate following the revised guidance or to elect the practical expedient to use a risk-free rate?**

| Generally expect clients to determine an incremental borrowing rate  | 18% |
| --- | --- |
| Generally expect clients to elect the practical expedient and use the risk free rate | 40% |
| Too soon to tell  | 42%  |

 

**10) Do you have any questions about any of the following topics as they relate to the new lease accounting standard: {could select multiple responses}**

| I have no questions about the new lease standard | 22% |
| --- | --- |
| Policy elections and practical expedients | 18% |
| Book vs. tax implications  | 14% |
| Guiding clients on how to collect lease data | 13% |
| Selecting a software solution  | 12% |
| Impact on debt covenants  | 11% |
| Identifying and classifying client leases  | 10% |

 

**11) Do you feel the FASB has adequately explained what is required for you to help clients comply with the new lease accounting standard?**

| Yes | 75% |
| --- | --- |
| No | 25% |

 

**12) Does implementation of the new revenue recognition guidance and the new leasing guidance in consecutive years an issue with clients?**

| Yes, implementation is straining resources   | 57% |
| --- | --- |
| No, there is little or no overlap between the two standards  | 19% |
| Too soon to tell  | 23% |

 

**13) With major changes to revenue recognition and leases in consecutive years, should FASB have allowed for more time between initiatives to allow for easier implementation?**

| Strongly agree with more time between standards  | 27% |
| --- | --- |
| Agree | 32% |
| Neutral | 27% |
| Disagree | 12% |
| Strongly disagree, no need for more time between standards | 1% |

 

The survey was conducted in September and October 2018.

For more information go to: [www.LeaseCrunch.com](https://www.leasecrunch.com)

 

 

#  #  #  
**Press Contact:**

John Vita

John Steven Vita Communications

[John.vita@jsvcom.com](mailto:John.vita@jsvcom.com)

847/853-8283

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