Lessors of Investment Property to be Excluded from New Lease Accounting Rules
When the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) first released their exposure draft on the proposed new lease accounting standards there was such a backlash from anyone affected by the standards that they decided to revise their proposal and reissue the exposure draft in the first half of 2012. Part of the new revisions consists of who is included in the scope of the proposed standard. At their last meeting on October 19-20, 2011, the FASB and the IASB tentatively decided to exclude a lessor’s (or landlord’s) lease of investment property from the scope of the new proposed lease accounting rules. Lessors of investment property would continue to recognize leases under the current standards.
While The Real Estate Roundtable feels the new exemption will help ease some of the concerns lessors of investment property may have about the new proposed standards, it does nothing for the concerns surrounding the lessees (or tenants) of the investment property.
To understand more about the exemption and what issues face lessees of investment property please read the article by the CoStar Group, Landlords Exempted from Proposed Lease Accounting Rules.
Please stay tuned to Anders Gray Matter for updates on the new proposed standards.