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CBRE Lease Accounting

How Will the New Lease Accounting Standards Impact Your Go-forward Occupancy Decisions?

What's New?


August 15, 2019 - The Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) that would grant private companies, not-for-profit organizations, and certain small public companies additional time to implement the new lease accounting standards.

For those companies impacted that have a calendar year-end, their effective date, once approved by the FASB, will be extended from January 1, 2020, to January 1, 2021.

Given the compliance challenges encountered by public companies, most of whom had an effective date of January 1, 2019, this extended timeframe should provide ample time for these entities to be in compliance with the new standard, as well as address any systems-related requirements.

FASB has invited all stakeholders to review the ASU and provide comments by September 16, 2019—this is a rare opportunity to provide feedback that could offer significant relief for companies having to comply with the new standard. If these proposed changes represent a positive or negative impact to your company, you are encouraged to provide feedback to the FASB.

If you are interested in providing comments to the FASB, you can submit them in one of three ways:

  • Using the electronic feedback form available on the FASB website at Exposure Documents Open for Comment
  • Emailing comments to [email protected], File Reference No. 2019-750
  • Sending a letter to “Technical Director, File Reference No. 2019-750, FASB, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116.”

To review the proposed update in its entirety please click here.

July 17, 2019 - The Financial Accounting Standards Board (FASB) unanimously voted to direct the FASB staff to draft a proposed Accounting Standards Update (ASU) pushing back the effective date of the new lease accounting standard by one additional year for private companies, as well as non-profits and small reporting companies. Given the compliance challenges encountered by public companies, most of whom had an effective date of January 1, 2019, this extended timeframe should provide ample time for these entities to be in compliance with the new standard, as well as address any systems-related requirements.

For those companies impacted that have a calendar year-end, their effective date, once approved by the FASB, will be extended from January 1, 2020, to January 1, 2021. As the FASB is expected to formally vote on the ASU after a 30-day public comment period, this update is likely to be adopted by late September.

For more detailed information, you can view the webcast of the FASB meeting and read the tentative decisions from the meeting on the FASB’s website (see Topic “07/17/19 Leases implementation”).

FASB Website

March 2019 - The meteoric growth of the flexible office space sector is unprecedented in commercial real estate. However, the flexible terms of a flexible-space membership agreement, combined with the principles-based definition of a lease, have created a bit of an accounting conundrum: are these agreements “leases” as defined by the new accounting standards? CBRE has written an article that seeks to answer this question. Read more on CBRE’s Agile Real Estate Knowledge Hub.

Agile Real Estate Knowledge Hub

January 2019 - CBRE has prepared an FAQ document to provide a refresher on the changes to lease accounting and to assist you in understanding key technical aspects of the new standards and the possible influence on future occupancy decisions. Click below to download the FAQ.

Lease Accounting FAQ

September 2017 - CBRE released the Lease Accounting Calculator, a web-based “interview-style” tool, in preparation for the new lease accounting standards which have an effective date in the U.S. in 2019 for public companies (2020 for private companies), while for all companies outside the U.S. there is an effective date of 2019. On September 19, 2017, CBRE's Lease Accounting Task Force hosted an open call to review the relevant aspects of the new lease accounting standards and demonstrate how to use the new Lease Accounting Calculator. To access a recording of the call please use the link immediately below: 


August 2017 - As an industry leader, CBRE is focused on educating our clients and helping them understand the potential financial impact of entering into a lease based on the new lease accounting standards. As virtually all leases will be recorded on a company's balance sheet, a significant departure from today's off-balance sheet treatment for operating leases, it is more important than ever to know the possible financial impact prior to lease execution.

To further this goal, CBRE has developed a web-based “interview-style” tool, the Lease Accounting Calculator, to provide you with a better understanding of the nuances of the new lease accounting standards, as well as an estimate of the possible financial impact that entering into a lease can have on your financial statements based on either the new or existing FASB or IASB standards.

For an overview of the tool and methodology and to use the Calculator, please click below.


June 2017 - According to the newly released joint survey conducted by CBRE and PwC addressing the new lease accounting standards, 23% of the more than 600 respondents representing over 15 industries have not yet started to implement the new lease accounting standards nearly 18 months after they were issued by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB).

The survey results do indicate that 66 percent of those responding have at least formed an internal working group to address the adoption of the new standards. This is an important first step for any company as the complexity and nuances of the new standards will require greater collaboration and sharing of information between business units than they are accustomed to.

“The survey results confirm that many public companies, for various reasons, including concentrating on implementing the new revenue recognition standard in 2018, have not been focused on the new lease accounting standards. These companies are now beginning to realize they are only six quarters away from the effective date and that it is time to pick up their pace,” said Jeff Beatty, Senior Managing Director of CBRE’s Financial Consulting Group and leader of the company’s Global Lease Accounting Task Force.

To review the full results of the CBRE and PwC survey please click here.

In April 2016, CBRE and PwC held a joint webcast entitled “New Lease Accounting Standards and the Potential Impact on your Company and Real Estate Strategies”. This insightful webcast presented by subject matter experts from both CBRE and PwC focused on three primary areas of the upcoming changes that will impact virtually every company to some degree: 1) Overview of the new standards 2) What companies can be doing now to prepare for the changes 3) How might the new standards affect a company’s real estate strategies

To access the recording of the webcast (both audio and video) please click here and the presentation deck from the webcast can be downloaded by clicking here.

On February 29, 2016, CBRE’s Task Force on Lease Accounting issued a white paper reviewing the impact the new accounting standards will have on the go-forward real estate strategies of lessees. Whether it is a lease vs. own decision or the monetization of an asset by means of a sale/leaseback, companies will now want to know the financial impact of a real estate transaction on their balance sheet before making a decision. Understanding the nuances of the new standards, as well as possible unintended consequences, is important for all companies given the new environment that will soon exist where virtually all leases are capitalized.

The New Lease Accounting Standards Are Issued: What Real Estate Strategies Should Lessees Consider?

In January 2016, CBRE’s Task Force on Lease Accounting issued a detailed review of the IASB’s newly issued standard, as well as the key components of the soon to be issued FASB standard. Written in a Frequently Asked Questions (FAQ) format, this in-depth review from the lessee perspective allows one to quickly understand the details of the new standards, as well as know the key differences between each of the standards.

IASB Issues New Lease Accounting Standard: FASB Is Not Far Behind
(Really, we are not crying wolf!)

The FASB will be issuing their new leasing standard in Q1 2016.  Read this article from the FASB on what lessees can be doing in advance to be ready for the new standard.

Preparing for the Leasing Standard: What a Lessee Needs to Know

There are several steps companies can still undertake prior to the issuance of the new standard in Q1 2016 to avoid being caught flat-footed once the Standard is issued.  Please read this excerpt from CBRE’s Global Viewpoint White Paper for further insight into this topic.

Changes To Lease Accounting Are Coming: What Companies Should Be Doing NOW

Changes to Lease Accounting

In August 2010, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), collectively the “Boards,” issued the Original Exposure Draft (OED) for the “Leases” project. A proposal requiring all leases to be capitalized (i.e., on balance sheet). Just shy of three years after issuing the OED, the Boards issued the Revised Exposure Draft (RED) in May 2013, which represented the culmination of the Boards’ deliberations after receiving 800 comment letters and holding numerous joint working group meetings, public roundtables, workshops, webcasts and other outreach activities related to the OED. While the RED addressed some of the concerns arising from the OED, it still drew an additional 600 comment letters voicing continued concerns over its complexity and burdensome requirements.

Now, almost three years after issuing the RED and over five and one-half years after issuing the OED, the "leases" initiative is a reality. The IASB issued their standard (IFRS 16) on January 13, 2016 and the FASB issued it's new standard (ASC 842) on February 25, 2016. The IASB's effective date is 2019, while the FASB's effective dates are 2019 for public companies and 2020 for non-public companies. In the case of both standards, companies will have the ability to "early adopt" the new standard.

The Boards have agreed on the primary objective of requiring lessees to record the liability associated with leases "on balance sheet". Unfortunately, there were several areas where they were unable to reach agreement. As a result, a uniform global lease accounting standard has not been achieved and each board is issuing its own standard.

As these new standards will have a significant impact on companies who follow U.S. GAAP and/or IFRS, we encourage you to gain an understanding of this topic. The technical updates and thought leadership papers published by CBRE's Global Task Force on Lease Accounting will allow you to understand in greater detail the technical requirements of the new standards, as well as the financial impact and strategic implications of this broad array of changes facing the real estate industry.

Key Dates

As has been the case for five years now, CBRE’s Task Force will continue to keep you posted as this epic project progresses towards the finish line.

Additional Information

FASB Votes To Proceed With Final Standard On Leases (November 2015)

WSJ: "A Sure Fire Way To Harm The Economy" (November 2014)

EY: "Boards Make Progress on Leases Project" (April 2014)

Journal of Accountancy Article: Leases - What Should Companies Do Now?

Previous White Papers

July 2015:
Proposed Changes to Lease Accounting:
Is That The Finish Line…Or Is It A Mirage?

September 2014:
To Converge or Not to Converge...That is the Question!

March 2014:
Lease Accounting Update: Let The Redeliberations Begin!

June 2013:
CBRE Global Viewpoint White Paper

June 2013:
CBRE Global Viewpoint Whitepaper FAQ’s

June 2013:
Joint Webcast with PwC Addressing Proposed Changes to Lease Accounting

June 2013:
Revised Exposure Draft on Lease Accounting Issued: Back on the Front Burner

May 2013:
Revi sed Exposure Draft on Lease Accounting Issued: Here we go again!

March 2013:
Lease Accounting update: Back to the Front Burner?

November 2012:
Another Delay for the Lease A ccounting Project

July 2012:
Accounting Boards Agree to Compromise

April 2012:
Accounting Boards at Odds = More Delays!

November 2011:
Revised Proposal Delayed, Lessors Catch a Break and Lessees May Now Argue for Same

July 2011:
FASB/IASB Will Solicit Additional Comments on the Revised Lease Accounting

June 2011:
The Accounting Boards Keep Moving the Target. FASB and IASB Make Another Change.

April 2011:
Comments heard loud and clear - Boards considering revisions.

CBRE's Comment Letters

CBRE submits comment letters to the FASB/IASB in response to the Original and Revised Exposure Drafts:

CBRE Leases 2013 Comment Letter

CBRE Leases 2010 Comment Letter

Exerpts from CBRE's 2010 Comment Letter

Related Services

Assists our organization and CRE leader clients with strategic decision-making through holistic, sophisticated and tailored real estate consulting services.
Our investment banking business in the Americas provides valuable guidance and solutions to clients across multiple real estate investment banking activities.
CBRE's team of dedicated Lease Accounting specialists equip companies for optimum decision-making by guiding real estate teams through the practical steps and actions required to collect, store and manage real estate data – preparing organizations for the new standards set to go into effect from January 2019.
GWS's sophisticated portfolio services specialists, engaged as part of a broader real estate outsourcing initiative, allow firms to focus on core strategic business issues.

Global Task Force

Jeff Beatty
Senior Managing Director
Financial Consulting Group
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+1 602 735 5655
Amie Sweeney, Vice President
Amie Sweeney
Vice President
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Chad Brown
Senior Director
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Brooke  Gary, Senior Manager
Brooke Gary
Senior Manager
Global Workplace Solutions
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Richard Hurst
Global Advisory Leader
Global Advisory and Portfolio Services
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Peter Kitchin
Portfolio Services, Americas Leader
Advisory & Transaction Services, Portfolio Services
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Kelly Korpusik
Director, Global Transitions
Advisory & Transaction Services, Portfolio Services
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Marc Kutler
Regional Finance Director
Global Accounting & Reporting
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Mike Nelson, Senior Managing Director
Mike L. Nelson
Senior Managing Director
Advisory & Transaction Services, Portfolio Optimization
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Kyle Redfearn, MAI
Senior Managing Director – Valuations for Financial & Tax Reporting, Practice Leader
Valuation & Advisory Services
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Barry Scott
Lease Admin Finance Manager
Portfolio Services
Jeffrey Shell
Executive Vice President
Capital Markets
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Bridget Smurthwaite
PS Sales & Technology EMEA
Portfolio Services
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Andrew Trott
Finance Business Partner
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