Friday, October 16, 2009

Accounting Change May Force Companies to Look at Owning or Shortening Lease Terms

Carl Zmaila :: Industrial Properties Group
Posted by: Carl Zmaila
Industrial Specialist
775 336 4623
The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are looking into changing the way companies carry leases on their financial statements. Right now, a lease is not considered a capital expenditure, but under the new rules this would change, making a lease an on-balance-sheet transaction.

What is the impact? Randyl Drummer of Co-Star reports the accounting change could impact corporations to the sound of well over $1 trillion. Experts believe that this will make companies reassess their leasing outlook and drive some companies to own and others to sign shorter leases.
To read Randyl Drummer’s article about FASB13 and the impact of the proposed rule change click here.

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