How FASB Changes Will and Won’t Impact Leasing

Beatty: “The size and complexity of companies’ lease portfolios will determine the challenge of transitioning to the new standard.”

LOS ANGELES—“Not your typical accounting change” is how CBRE Group and PricewaterhouseCoopers describe the new US and international standards that will move most corporate leases onto the balance sheet. The two firms have conducted a study charting the coming impact of the Financial Accounting Standards Board’s version of the new rules, which take effect in 2019 for publicly traded companies. It finds that while most corporate real estate executives don’t expect much of an impact on their leasing strategies in terms of whether to lease or own, managing the leasing data is another matter.

“The size and complexity of companies’ lease portfolios will determine the challenge of transitioning to the new standard,” says Jeff Beatty, senior managing director of CBRE’s financial consulting group and leader of the company’s Global Lease Accounting Task Force. “We believe that after companies formalize the process of gathering the relevant data, they will be surprised to find that they may have more leases than they originally thought.”