HOUSTON, TEXAS—Buried in the middle of a speech he was giving oninternational accounting standards in Singapore at the end of May,Hans Hoogervorst, chairman of the London-basedInternational Accounting Standards Board, droppedthis bombshell about the revamped lease accounting standard that itand its US counterpart, the Financial Accounting Standards Board,have been working on for years.

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"I will not bore you with the details, but more work needs to bedone. In the next couple of months we should be able to finalizeour work."

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Yes. After eight years and at least one reset in which theboards reissued their exposure draft, it appears IASB and FASB aregetting ready to finalize a converged standard for leaseaccounting.

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Or perhaps not. Certainly the industry has heard this before.For the record, Hoogervorst is referring to the exposure draftissued in May 2013, although the industry could be forgiven forhaving lost track.

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The industry could also be forgiven for dismissing Hoogervorst'scomment as so much white noise. Indeed, the accounting industrypress that covered his comments focused more on the results of aninternal study Hoogervorst also discussed, which found that thelease standard will ultimately only "significantly" affect 10% oflisted global companies.

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But what if the standard is actually almost here? Without adoubt real estate companies affected by the change that haven'tdone even the preliminary groundwork will have to do some fastrecalibrating.

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In short it is imperative that businesses start preparing nowfor the coming changes, according comments made by MikeMcLain, Transwestern's chief accountingofficer, in the to the third quarter edition of "Ask the Expert."

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His take is that in the best case scenario with final approvalby the end of the year, balance sheets would likely be impacted in2018.

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To prepare for the coming changes, McLain suggest companiesstart thinking about how how lenders will view this informationwhen the debt-to-EBITDA ratio changes.

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"They should ask if additional debt on the balance sheet willmake it more difficult to borrow money or otherwise affectfinancing arrangements" he says in the article. "These changes willalso require additional record-keeping capabilities. Occupiers mayeven consider self-funding tenant improvements in favor of shorterlease terms or lower rental rates."

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