Landlords monitor lease-accounting changes that are in the works

06/23/2010 | New York Times (tiered subscription model), The

An accounting standard that would dictate how leases are accounted for on a company's balance sheet likely would change the way companies view renting commercial real estate space. The Financial Accounting Standards Board and the International Accounting Standards Board have been working to merge their standards. Part of that change would be a requirement that companies recognize leases as assets and liabilities. It would not be pretty for landlords, said Mindy Berman of Jones Lang LaSalle. "On the day the standard gets implemented, all these companies will suddenly have to record much higher rent, and they are going to have to record this as a significant liability on their balance sheet," she said.

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