FASB and IASB
A review of the latest developments in the world of financial accounting standards for REIT was recently done. NAREIT Senior Vice- President for financial standards, George Yungmann, sat with REIT.com to review such standards.

Yungmann has pointed out that process has been slowed by changes at the top of both the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). By saying process, he pertains to the project being carried out by the IASB and FASB regarding the global convergence of financial accounting reporting standards.

Yungmann said, “We’re going to be well into 2012 before these standards get issued.”

A major impact on REIT may be felt due to some of the proposed changes to accounting for leases, Yungmann noted.

“The new proposal would essentially require that lessors report the sale of the right to use the property. There would be a gain or a loss recognized at lease inception or lease commencement, and there would be no rental income reported over the term of the lease. That’s a very dramatic change not only in the proposal, but in the way lessors report, and we do not believe that accounting will produce useful financial statements,” said Yungmann.




Some screen shots from REIT's interview with George Yungmann. Watch the video here »
According to Yungmann, exposure drafts will be reviewed by NAREIT and comments will be issued regarding its partners in the Real Estate Equity Securitization Alliance (REESA).


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