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What Real Estate Tenants Need to Know About FASB Accounting Standards

MIAMI—These new FASB rules take effect for 2019 for public companies and 2020 for private companies. Consider these issues now.

Nailah Tatum, a Tallahassee-based real estate lawyer with the Bryant Miller Olive law firm Nailah Tatum, a Tallahassee-based real estate lawyer with the Bryant Miller Olive law firm

MIAMI—New accounting standards coming from the Financial Accounting Standards Board (FASB) are expected to have a major impact on how commercial real estate tenants think about how best to structure their leases in coming years. The new standards will require companies that rent office, retail or industrial space to include the cost of any leases longer than 12 months on their balance sheets.

These new FASB rules take effect for 2019 for public companies and 2020 for private companies. But commercial real estate tenants should be thinking about the change now, because the standards will also require a “look-back” at lease costs for two previous years.

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