ATLANTA – (COMMERCIAL THREAD) – The Financial Accounting Standards Board (FASB) has officially voted to approve the postponement of the effective date of a number of accounting standards important to private businesses and not-for-profit organizations from December 15, 2019 as of December 15, 2020. Accounting is included in these proposed changes. Update of standards (ASU) n ° 2016-02, Leases (calendar year 2021). This is a one-year postponement of the effective date.
The delay follows the receipt by the FASB of a letter from the AICPA Technical Questions Committee requesting such delay. The FASB took up the matter on July 17, 2019, allowing public comment over a 30-day period.
Private companies now have more time to prepare for the biggest accounting change in 40 years. Industry experts at CoStar Real Estate Manager recommend that time be used wisely.
“Many public companies have underestimated the time required to collect rental data and integrate it into a proven system capable of handling the complex calculations required to meet the new ASC 842 standard,” said Matt Waters, CPA and Director of lease accounting at CoStar. “Even with the one-year delay, private companies should not slow down their efforts to understand the requirements and involve the different stakeholders in the department in the compliance project.”
A major challenge in implementing the new rental standard is the amount of work required to review rental agreements and identify what constitutes a lease. Many companies that have started this effort are finding that there is a lot more work to be done to capture all rental data than they initially thought. “This extra time will help companies identify the entire population, especially leases built into service contracts,” Waters said.
Additionally, CoStar Real Estate Manager recommends that companies evaluate lease accounting software that has proven to be successful for SOEs, most of which have implemented solutions to meet past FASB compliance deadlines required for public companies. public enterprises. Such solutions should ideally include full property and equipment rental management functionality to maximize the business value of compliance-driven investments. “Private companies should draw on the feedback and experience of their accountants and other private companies to quickly identify software vendors that have proven functionality and additional functionality to ensure a continuous flow of accounting processes.” Waters added.
For more information and to download a white paper on Lessons Learned in Corporate Rental Accounting, please visit www.costarmanager.com.
About CoStar Group, Inc.
CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of online commercial real estate information, analysis and markets. Founded in 1987, CoStar conducts extensive and ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our online suite of services enables clients to analyze, interpret and gain unparalleled insight into commercial property values, market conditions and current availability. LoopNet is the busiest online commercial real estate market with 5.8 million unique visitors per month. Realla is the UK’s most comprehensive digital commercial property marketplace. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters looking for stunning apartments and provide property managers and owners with a proven platform for marketing their properties. CoStar Group websites averaged over 52 million unique visitors per month in total during the second quarter of 2019. Headquartered in Washington, DC, CoStar has offices in the United States and Europe and Canada with a workforce of over 3,900 people worldwide, including the world’s largest professional research organization. For more information visit www.costargroup.com.