AY: Act Now to Prevent FASB Rule ‘Scramble’

“The deadline of January 2019 remains set,” Moynihan writes.

ATLANTA—Dec. 15, 2018 is closer than it seems, especially for companies that haven’t gotten themselves prepared for the implementation of the Financial Accounting Standards Board’s new lease accounting rules, followed two weeks later by the International Accounting Standards Board’s updated standards. No leases will be grandfathered in, and therefore, says Avison Young’s Sean Moynihan, the time is now to begin analyzing the new rules’ impact on companies’ financial statements.

“The main point about the FASB changes is this: How you negotiate the financial terms and conditions of a real estate lease will impact the financial success of your company,” says Moynihan, an AY principal and author of a new white paper on the subject. “By getting proper advice, from an advisor, who deals with the lease on the front end before the lease is done, your firm can control the impacts to your balance sheet and income statement. Many companies will be scrambling to gather the necessary information in 2018 if they don’t start preparing now.”