Upcoming Lease Accounting Changes

For the past few years the Federal Accounting Standards Board (FASB) has been working on developing accounting rules for lease transactions and equipment leases. These rules have still to be set, could occur later this year or in 2016, and may be retroactive. This will create a huge need for accounting and lease administration. All leases, both capital and operating, will be on the balance sheet. According to Bob O’Brien, a partner at consulting firm Deloitte, “The vast majority of tenants are going to focus on the economics of the lease rather than the accounting for it when coming to conclusions on what they want to do.” (National Real Estate Investor, November 2014)