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Press, Journal Article
It is a favorite model: one is selling one´s corporate
headquarter, and one is leasing it back from the
purchaser. The corporate headquarter disappears from
the balance sheet, and it shows up anymore only in the
profit and loss statement as rental expense.
The seller at once gets a lot of money, with which for
instance he can pay back loans. This lowers the interest
expense and it shortens the balance sheet, with the
consequence, that the equity share in percent of the
balance sheet total goes up. This situation is going to be
finished starting January 1, 2019.
After many years long deliberations the International
Accounting Standards Committee, IASB, has published
new regulations for leasing contracts. Who is setting
up international financial statements as per IFRS
regulations, must, as lessee, take up leasing objects
into his balance sheet. The sold corporate headquarter
is thus showing up again in the balance sheet. On the
asset side as right of utilization, against which a liability
of the same size is booked on the liability side. The right
of utilisation is written off over the time frame of the
contract, the liabilities are decreased step by step with
the concomitant leasing payments.
This first sounds like pure accounting technique and little
exciting. But first of all many corporations are impacted
by this, as today ever more buildings, equipments,
aircrafts, vehicles and other objects from the copier to
the telephone tower are being leased. It also makes no
difference as to whether one defines the relationship
as leasing or as rent. Whenever there is an utilization
SELL FIRST, THEN UTILISE
SO SIMPLE THIS IS NOT ANY MORE
NEW ACCOUNTING REGULATIONS HAVE SERIOUS CONSEQUENCES FOR LESSEES AND FOR
READERS OF FINANCIAL STATEMENTS
by GEORG GIERSBERG, Frankfurter Allgemeine Zeitung, Frankfurt am Main, Germany, February 1, 2016
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