FASB | Facility Executive - Creating Intelligent Buildings

CRE technology professionals wear a number of hats. My last post on this site addressed how CRE technology professionals can support their organizations’ M&As. Here, I’ll delve into how we can support industry governance — the hot issue on this topic right now is FASB/IASB requirements. If you are not familiar with these requirements, you are not alone. In fact, several months ago I attended a software users’ conference where one of the sessions focused on the proposed FASB/IASB requirements. The speaker asked how many people in the room of about 150 attendees had started to plan for implementing these changes first proposed in 2013. Less than 10 people raised their hands. A voice from the audience said, “How do we know these new requirements will be approved and why should we plan for something that may not happen?” Clearly, the majority of those in attendance were comfortable with a reactionary approach to what was to come. As the speaker addressed the question, the impact of the proposed FASB changes took hold of the audience like a tsunami approaching the shore. For nearly all the attendees, the full impact of these changes was a new topic introduced that day. Leases and the associated cost of borrowing would now be accounted for on the balance sheet. In some cases, the balance sheet could become much weaker than previously presented — even though actual expenses have not changed. A weakened balance sheet could also have the potential of increasing the cost of the company’s overall borrowing in the future. Will these proposed changes increase the tendency for lease terms to be shortened? Will shorter lease terms affect the value of the leased property, whether it be real estate or equipment? Will the cost of leasing likely go up — or down? While there is still much to be addressed, CRE technology professionals can support their organization by ensuring that their information management strategy is providing accurate and “real-time” data; a cohesive data analytics platform that can be accessed – and shared – by all business functions for  optimal decision-making. What’s next?  The next steps outlined by the FASB Board at the November 2015 meeting included directing staff to draft a final version of the Accounting Standards Update for formal vote by written ballot.  The effective date of the final leases standard for public business entities will be for fiscal years starting after December 15, 2018, and for all other entities for fiscal years beginning after December 15, 2019. Once the final standard is issued, early application of the change will be... ...Read More...


CRE technology professionals wear a number of hats. My last post on this site addressed how CRE technology professionals can support their organizations’ M&As. Here, I’ll delve into how we can support industry governance — the hot issue on this topic right now is FASB/IASB requirements. If you are not familiar with these requirements, you are not alone. In fact, several months ago I attended a software users’ conference where one of the sessions focused on the proposed FASB/IASB requirements. The speaker asked how many people in the room of about 150 attendees had started to plan for implementing these changes first proposed in 2013. Less than 10 people raised their hands. A voice from the audience said, “How do we know these new requirements will be approved and why should we plan for something that may not happen?” Clearly, the majority of those in attendance were comfortable with a reactionary approach to what was to come. As the speaker addressed the question, the impact of the proposed FASB changes took hold of the audience like a tsunami approaching the shore. For nearly all the attendees, the full impact of these changes was a new topic introduced that day. Leases and the associated cost of borrowing would now be accounted for on the balance sheet. In some cases, the balance sheet could become much weaker than previously presented — even though actual expenses have not changed. A weakened balance sheet could also have the potential of increasing the cost of the company’s overall borrowing in the future. Will these proposed changes increase the tendency for lease terms to be shortened? Will shorter lease terms affect the value of the leased property, whether it be real estate or equipment? Will the cost of leasing likely go up — or down? While there is still much to be addressed, CRE technology professionals can support their organization by ensuring that their information management strategy is providing accurate and “real-time” data; a cohesive data analytics platform that can be accessed – and shared – by all business functions for  optimal decision-making. What’s next?  The next steps outlined by the FASB Board at the November 2015 meeting included directing staff to draft a final version of the Accounting Standards Update for formal vote by written ballot.  The effective date of the final leases standard for public business entities will be for fiscal years starting after December 15, 2018, and for all other entities for fiscal years beginning after December 15, 2019. Once the final standard is issued, early application of the change will be... ...Read More...

Proposed FASB/IASB Changes: What CRE Should Know

Content related to ‘FASB’

Proposed FASB/IASB Changes: What CRE Should Know

Proposed FASB/IASB Changes: What CRE Should Know

CRE technology professionals wear a number of hats. My last post on this site addressed how CRE technology professionals can support their organizations’ M&As. Here, I’ll delve into how we can support industry governance — the hot issue on this topic right now is FASB/IASB requirements. If you are not familiar with these requirements, you are not alone. In fact, several months ago I attended a software users’ conference where one of the sessions focused on the proposed FASB/IASB requirements. The speaker asked how many people in the room of about 150 attendees had started to plan for implementing these changes first proposed in 2013. Less than 10 people raised their hands. A voice from the audience said, “How do we know these new requirements will be approved and why should we plan for something that may not happen?” Clearly, the majority of those in attendance were comfortable with a reactionary approach to what was to come. As the speaker addressed the question, the impact of the proposed FASB changes took hold of the audience like a tsunami approaching the shore. For nearly all the attendees, the full impact of these changes was a new topic introduced that day. Leases and the associated cost of borrowing would now be accounted for on the balance sheet. In some cases, the balance sheet could become much weaker than previously presented — even though actual expenses have not changed. A weakened balance sheet could also have the potential of increasing the cost of the company’s overall borrowing in the future. Will these proposed changes increase the tendency for lease terms to be shortened? Will shorter lease terms affect the value of the leased property, whether it be real estate or equipment? Will the cost of leasing likely go up — or down? While there is still much to be addressed, CRE technology professionals can support their organization by ensuring that their information management strategy is providing accurate and “real-time” data; a cohesive data analytics platform that can be accessed – and shared – by all business functions for  optimal decision-making. What’s next?  The next steps outlined by the FASB Board at the November 2015 meeting included directing staff to draft a final version of the Accounting Standards Update for formal vote by written ballot.  The effective date of the final leases standard for public business entities will be for fiscal years starting after December 15, 2018, and for all other entities for fiscal years beginning after December 15, 2019. Once the final standard is issued, early application of the change will be… …Read More…


Changes To Lease Accounting: What Do Facility Managers Need To Know?

Changes to lease accounting standards may affect companies that lease equipment and real estate as part of their day-to-day operations, including those in the construction industry. Because the topic is of such critical importance and it can seem complex to many, William G. Sutton has written this article.