{"id":1004028374,"date":"2011-04-06T06:40:13","date_gmt":"2011-04-06T14:40:13","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004028374"},"modified":"2022-12-09T02:31:36","modified_gmt":"2022-12-09T10:31:36","slug":"is-the-industry-ready-for-lease-accounting-changes","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/is-the-industry-ready-for-lease-accounting-changes\/","title":{"rendered":"Is the Industry Ready for Lease Accounting Changes?"},"content":{"rendered":"

By John DeCouto, Senior Partner, Lee & Associates Atlanta<\/p>\n

\"\"<\/a><\/p>\n

With the effects of the great recession receding, many markets are reporting increased capital chasing triple-net-leased facilities. <\/p>\n

This is evidenced by CoStar\u2019s analysis of sales data for retail net leased properties in the fourth quarter of 2010. Their data shows that the fourth quarter 2010 posted a 22 percent increase in the number of transactions over the same period in 2009. Restaurants (primarily quick-service), and convenience stores lead the way, both showing strong year-over-year price increases. With the competition heating up, can a buyer be sure that the credit analysis done today will not be impaired by the lease accounting changes in the pipeline?<\/p>\n

In a recent Deloitte survey of corporate real estate end users and services providers highlighting the Financial Accounting Standards Board\u2019s proposed changes to lease accounting, 90 percent of the respondents said their companies were not well prepared to implement the new accounting standards. Only 34 percent said that they have prepared (or expected to in 2011) a pro forma balance sheet and income statement to determine the overall impact on their company and 65 percent said they were not very confident in the integrity of the lease data they had to comply with the new standard. <\/p>\n

According to Andy Corsini, tax firm KPMG\u2019s National Real Estate Audit Sector Leader, \u201cThe implications [of the changes] extend beyond preparation of financial statements, as the new lease standard will have significant implications on the way companies do business, structure transactions, communicate expectations to capital markets and negotiate loan covenants.\u201d The extent of the impact can limit liquidity and restrict credit. <\/p>\n

Preparing for the lease accounting changes will require new processes, systems, communication and good data. The Deloitte survey shows that 75 percent of respondents at companies with 1,000 or more leases were extremely or very familiar with the proposed standards, that number drops to 58 percent for companies with 100 to 999 leases and drops again to 37 percent at companies with less than 100 leases. In addition, 90 percent of all respondents said their companies were not well prepared to implement the new lease accounting standards. If they aren\u2019t ready, can you rely on their financial statements today?<\/p>\n","protected":false},"excerpt":{"rendered":"

By John DeCouto, Lee & Associates Atlanta<\/p>\n

With the competition for triple-net-leased facilities heating up, can a buyer be sure that the credit analysis done today will not be impaired by the lease accounting changes in the pipeline?<\/p>\n","protected":false},"author":1537,"featured_media":1004028375,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004028374","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nIs the Industry Ready for Lease Accounting Changes? - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/is-the-industry-ready-for-lease-accounting-changes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is the Industry Ready for Lease Accounting Changes?\" \/>\n<meta property=\"og:description\" content=\"By John DeCouto, Lee & Associates Atlanta With the competition for triple-net-leased facilities heating up, can a buyer be sure that the credit analysis done today will not be impaired by the lease accounting changes in the pipeline?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/is-the-industry-ready-for-lease-accounting-changes\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2011-04-06T14:40:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T10:31:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/04\/DecoutoJohn2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"500\" \/>\n\t<meta property=\"og:image:height\" content=\"700\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"John DeCouto\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/is-the-industry-ready-for-lease-accounting-changes\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/is-the-industry-ready-for-lease-accounting-changes\/\",\"name\":\"Is the Industry Ready for Lease Accounting Changes? 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