Planon: Changing rules and getting your leases in order


The new rules for lease accounting will make a significant mark on the corporate world. In 2019 organisations which report under FASB or IFRS will have to show virtually all their leasing contracts in their balance sheets. Sounds logical?  Currently, only 15 per cent of the 3,000 billion euros of leasing currently appear on balance sheets worldwide, so the new rules will certainly have a significant impact…

Many organisations now use off-balance leasing contracts, including for major liabilities such as renting an office building. The premises and the rental liability are, however, not shown on the balance sheet, so that ratios appear to be more favourable. This will change with the new rules in 2019, but large organisations will already need to introduce these drastic changes now.

Accounting firm PWC has calculated what the introduction of the new rules means right now. In the retail sector, debt on the balance sheet would double; for instance, solvency would drop from 41 to 27 per cent, and the debt ratio would rise from 1.1 to 2.5 times the operating result.

A threat? In fact I would regard it as an opportunity, certainly for property managers. It will become more relevant to consider your real estate critically and to apply alternative concepts, for example by reducing the quantity of property and by enhancing its flexibility…

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