New FASB Lease Standard Could Inflate Balance Sheets
[{"id": "d0u623m", "text": "I work in tenant rep in the DC area. We had a training a couple of weeks ago and they mentioned this as something we should be using as info to give when making our phone calls. The only problem is none of us at the office can actually make total sense of what the new FASB law will do, and how we can tell tenants why they should care. I understand that now companies will be forced to put their lease obligations on their balance sheets and this could make their company look less favorable to potential investors....but is this it? What are the other implications? \n\nCould anyone provide an ELI5? That would be awesome and very much appreciated to a bunch of us here I am sure. ", "replies": [{"id": "d0upp13", "text": "there was a post on this thread a couple weeks ago that had some solid answers.", "replies": [{"id": "d0vh9f4", "text": "I know and trust me I've read it. I still feel like although this should be a black and white issue, for some reason there is so much to be debated on the interpretation and what it means to the tenant.", "replies": [{"id": "d0vxvfr", "text": "&gt; getrefm.com\n\nPM me, I can send you some info that might help", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "d0utttm", "text": "Go to PWC's website [http://www.pwc.com/us/en/cfodirect/issues/lease-accounting.html](http://www.pwc.com/us/en/cfodirect/issues/lease-accounting.html) they have a lot of information", "replies": [], "depth": 2}, {"id": "d0uxy8i", "text": "Here's my response from the previous thread:\nhttps://www.reddit.com/r/CommercialRealEstate/comments/48catu/iasb_and_fasb_new_lease_accounting_standards_what/d0l3q6m\n\nMy takeaway was that I didn't think it would really have a huge impact on most companies.  Lease obligations weren't reflected on balance sheets but they were always disclosed in the footnotes of the financial statements so if you were a somewhat sophisticated investor, you would have taken this into account.  (Or at least most Wall Street equity research analysts do, and many rely on their reports and recommendations.)\n\nThe one thing I missed in my response is that the only thing that would probably be drastically affected would be certain debt ratios that lenders look at.  However, hopefully most lenders are in the know at this point and would account for any changes in ratios due to the new standards.", "replies": [], "depth": 2}], "depth": 1}]