As I approach a milestone birthday I am amused by how the arc of my career has come full circle. As a brand new IBM sales trainee in 1980 my first assignment was to create a rent vs own analysis to convince companies that were renting rooms full of the IBM 029 card punch machines … Continued
The irony has not escaped us that on April Fool’s Day 2019, all of the public companies around the world, reporting on a calendar year basis, will be preparing for their first quarterly financial reports under the new Lease Accounting standards (ASC 842 and IFRS 16).
With the initial transition date for the new Lease Accounting Standards less than two years away, a large number of companies are already in their comparative “look back” period. For US based, calendar year, public companies, the period of dual tracking between the current and future standards commenced January 1, 2017. For many of the … Continued
In Michael Lewis’ book “Moneyball”, which was made into a motion picture, he recounts the transformation of the Oakland A’s, a low budget major league baseball team using advanced analytics, rather than traditional “gut instincts” of baseball men, in evaluating players and building rosters. Theo Epstein became one of the most successful practitioners of this … Continued
New lease accounting standards have opened up a new set of issues for companies. As seasoned consultants on these standards, we are often asked for our real estate perspective. Here is a view on handling commercial ground leases.
Authored by Glenn Madere and Louis Battagliese In August 2010 FASB proposed a new lease accounting standard that it finalized in February 2016. Much of the five-and-a-half-year incubation period can be traced to vocal opposition by commercial tenants and their advisors who objected to what FASB now calls “finance lease” treatment for virtually all leases—the … Continued
An interesting finding came out of a recent survey by one of the Big Four accounting firms. Only 8% of 13,000 questioned said they have a good understanding of the recently announced changes to the Lease Accounting Standard. With 92% somewhere between “general understanding” and “haven’t started”, the impending IASB/FASB deadline is going to seem … Continued
JCP – FASB Executive Primer
The heavily debated, long awaited IASB leases standard is finally announced. How to prepare for changes ahead.
The realization that corporate occupiers of commercial real estate should look at the value that their occupancy creates, and manage real estate more as a strategic asset than simply a cost of doing business, is long overdue.