Potential Change in Lease Treatments for Accounting Purposes

There is a proposal afoot to change how leases are treated. 

According to the Journal of Accountancy:

"The proposal calls for lessees to report a straight-line lease expense in their income statement for most real estate leases. In most equipment and vehicle leases, lessees would recognize leases as a nonfinancial asset measured at cost, less amortization. This would result in a total lease expense that generally would decrease over the lease term."

The topic is controversial and could impact every business with a lease and every investor who leases space.    

See more on this at:

 

http://www.rer.org/Roundtable-Weekly---smartforms/Active/2013/10/Roundtable-Weekly---October-4,-2013-stories.aspx

 

and

http://www.journalofaccountancy.com/News/20138651.htm

 

-- Kathy Bissell