WASHINGTON, DC-Building owners and occupiers--basically everyone in the real estate industry--will likely have to wait even longer for some certainty with the forthcoming lease accounting changes. There is a possibility that the Financial Accounting Standards Board and the International Accounting Standards Board might re-expose the draft, said panelists at one of the sessions held during the Building Owners and Managers Association International’s conference.

The standard, which should have been finalized this month, was already pushed back earlier this year when FASB and IASB decided they needed more time. “The boards are not willing to sacrifice quality in order just to get the standard out on time,” said Serena Wolfe, an accountant with Ernst & Young. However now there is talk in the industry that FASB and IASB might roll back the process even more, namely because they did so with another pending standard, for revenue recognition. “The boards made a point of saying when the re-exposed the revenue recognition draft, that this wouldn’t necessarily happen with the lease accounting standard,” Wolfe said. “But it is within the realm of possibility. Briefly, crucial points in the timeline for getting this standard into place included Q3 2010 when the exposure draft of the standard was released; Q4 2010, Q1 2011, when roundtables were held to discuss it; Q3 2011, when the staff draft is now expected and Q4 2011, for final standards. If the boards decide to re-expose the draft they basically go back to step one and begin again.

Wolfe and her colleague, Ernst & Young East Coast leader Joshua Herrenkohl’s best guess as to when a standard will be put in place: 2015 or 2016. “That is because the boards have promised to give sufficient time for the standard to be implemented,” Wolfe said.

Another giant unknown are several key issues with lessor accounting - the part of the equation that the two boards appear to be having difficulty converging. “There are many open questions that are essential to this group that still need to be addressed,” Herrenkohl said.

Some issues are clear even now, however: One, both lessees and lessors will have to change communication terms and patterns due to the accounting regulations, with the lessees needing more financial data for their bookkeeping. Also, IT implementation to meet these new requirements is bound to be costly and time-consuming. Finally, the tenants most affected by the regulations will be retailers, given the vast number of locations they have.