A new poll from PwC and CBRE Group suggests nearly one-fourth of companies have not yet begun to figure out how they will comply with the new lease accounting standard that begin to take effect in 2019.

The survey of more than 600 finance executives included a mix of companies across sectors, only 65 percent of which were public companies, the first to face the new accounting in 2019. Private companies have an extra year to prepare for standard, which requires companies for the first time to elevate their leased assets and related liabilities out of footnote disclosures and onto the face of the balance sheet.

More than half of survey respondents said their companies were in the process of assessing how their balance sheet will be affected by the new on-balance-sheet recognition of leases. Another one-fourth said they had stared the implementation process.

A sobering 47 percent of those in the implementation phase said the adoption was taking more effort than they expected. The biggest surprises included the data collection effort, the systems requirements, and the resources that would be necessary to get the job done.

Sheri Wyatt, PwC partner in capital markets and accounting advisory services, says in some ways she finds the results surprising, and in other ways not so much. Many companies are still in the throes of adopting even bigger rules that take effect even sooner governing how companies are to recognize revenue in financial statements, and the survey includes responses from a good number of private companies who have an extra year to prepare.

On the other hand, “companies are expecting this to be quite a bit of big, heavy lifting,” Wyatt says. “With the standard taking effect in 18 months, for public companies that haven’t started yet, that could be viewed as a relatively short period of time.”

Wyatt says she sees many companies still in the exploratory phase of adopting the new accounting, perhaps establishing steering committees or in the early stages of getting started. “In our conversations with clients, we’re trying to get them focused on accelerating the process of understanding what their lease portfolio is and what the data gaps are. Getting the data, assessing the data for quality, identifying a solution, and migrating the data to the solution can be time consuming.”

Experts have warned companies that data collection would be challenging, gathering lease contracts from what is likely a decentralized process at most companies and studying them for the terms and conditions that must be reflected in the new accounting. In the recent survey, companies said 55 percent of their real estate assets are leased, and 44 percent of their non-real estate assets are leased.

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