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50 FASB-Focused Fields You Can’t Do Without

50 FASB-Focused Fields You Can’t Do Without

Most companies are now aware of the pending FASB changes and some have even estimated the impact the new standard will have on their financial statements. CoStar Real Estate Manager has done more than just talk about it. We’ve provided details about the specific data fields that must be captured to meet new requirements.  These data elements have already been delivered in our software to our customers giving them the ability to start gathering the additional information at the same time they are getting their real estate data ready for the pending standard.  For many new customers, this is all part of one cohesive exercised during their initial implementation of the CoStar Real Estate Manager software.

Don’t bury your head in the sand

CoStar Real Estate Manager is meeting the “FASB Challenge” head on . . . and so should you. Here are six reasons why:

  • Real estate data is taking on greater visibility
  • More lease data will be needed
  • Abstracted lease data will need to be stored differently
  • Lease administrators will have more decisions to make
  • Transitioning to the new standard will require a significant effort in addition to current workload
  • The new FASB standard applies to non-real estate leases

These challenges point to the need for more centralized, corporate involvement, a system to support the collection for all the relevant data and supporting restatements and the ability to manage the most likely need for new corporate policies and accounting. This will require the coordination and effective communication from more parts of the organization than ever before.

Retailers face additional challenges

In addition to the six challenges listed above, retailers also need to consider:

  • More guidance will be needed to distinguish a lease from a contract
  • Tenants may opt for shorter leases to minimize the initial recognition of lease expenses
  • Co-tenancy can significantly affect the outlook for a lease
  • The projected expense of “leave-in-condition” clauses must be estimated
  • Determining the recognition term will require judgement

Hold on to your hat!

If you ever doubted the complexity and amount of work that will be required to meet reporting requirements under the new standard, the 50 FASB-Focused Data fields defined in this document should help you face reality! These data elements were added to the CoStar Real Estate Manager software system in January 2012, and we are closely monitoring FASB announcements to preemptively identify any additional fields that might be needed.

Added benefit? Better real estate decision making

It’s easy to become a bit cynical if you’re the one faced with all the responsibility and work involved in preparing and working with the new FASB standard. However, having at your disposal instant access to real estate information that is complete, accurate and consistent means that not only will you be able to meet the challenges of the new lease accounting standard, but you’ll also make better real estate decisions for your company.  The new FASB standard gives all of us in the commercial real estate industry the “compelling event” we’ve needed to change our worlds for the better.

Interested in reading more? Download the full PDF article here.