Yesterday I read an article in BKD Insights, a construction and real estate newsletter published by the accounting and advisory firm BKD, LLP, that I believe is important to pass along to my friends and clients. The subject of the article is about a proposal that if adopted, will impact any business that leases office, industrial, or retail building space. According to the article, Proposal Would Make Significant Change in Lease Accounting: "In the paper the FASB and the IASB discuss a proposed change in lease accounting. It would require the lessee to recognize an asset representing its right to use the leased item and a liability for its obligation to pay rentals".
This change will impact some businesses more than others, but based on the example provided in the article, the impact on businesses with substantial annual lease costs could be significant. Therefore, I'm monitoring this potential change in accounting so that if adopted, my clients that occupy Indianapolis office space or facilities elsewhere around the U.S. will be aware of the benefit to their businesses. Thank you to my friends at BKD, LLP for providing us with this valuable insight.
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