For some entities’ fiscal years beginning after December 15, 2018, we can expect to see the appearance of new property lease standards as enforced by the Financial Accounting Standards Board. Commercial real estate industry lease agreements will be subject to a new accounting standard intended to force the recognition of leases that run longer than twelve months as assets or liabilities on the books.
At the 2010 REALTORS® Conference & Expo, NAR leadership approved a new policy statement on lease accounting. The statement responded to the Financial Accounting Standards Board (FASB) and International Accounting Standards Board’s (IASB) proposal that, if passed, would put nearly $1.3 trillion in leased assets back onto companies’ balance sheets, a move that would particularly hurt especially lessees and lessors of commercial real estate. Below is the actual Issues Summary: