According to GlobeSt.com, the Financial Accounting Standards Board and the International Accounting Standards Board are moving closer, albeit slowly and with re-exposed drafts along the way, to their goal of new converged accounting standards for leases. Although the two accounting-standards setters have re-exposed a draft, thus pushing the day of reckoning off, there is little doubt that it is coming.
Essentially, the standards will require tenants to place leases on their balance sheets—an enormous line item that consists of anything from office, business and farm machinery to, yes, real estate.
The costs to businesses are expected to be enormous. The Equipment Leasing and Finance Association, which has been tracking the issue, notes that leases account for hundreds of billions of dollars in transactions annually throughout the global economy.