New Accounting Change effects Office Occupiers
Find out about the office lease accounting change and how it might affect companies moving office and the wider office occupier market.
The International Accounting Standard Board (IASB) has proposed that companies will now have to present all office lease obligations on their balance sheet. Whilst proposals are still being finalised, it looks like all companies will have to declare all real estate leases in company accounts by 2015.
Research by BNP Paribas Real Estate warns that the new accounting standard will have a "profound" effect on the commercial real estate sector; and in particular office occupiers and companies looking to move office.
The likely outcome of the new accounting change will mean office occupiers will opt for shorter, more flexible office leases to minimise the level of exposure on their balance sheet; compared to Landlords, who will want to retain longer term leases with secure income. Office tenants are also likely to want predictable and measurable RPI linked office leases or fixed uplifts.
Companies considering moving office should act now to ensure their real estate data is up-to-date and accurate. Busineses can then plan ahead and strategise effectively using expert advice from Real Estate Professionals.
To find out more about how this new accounting legislation will affect you, talk to your local Property Consultant. They will negotiate the most suitable office lease on your behalf to minimise the effect of these changes on your business.