Monday, November 15, 2010

Tax Law Changes Proposed in 2011 on Leases - IMPORTANT

For any business that leases property, furniture, equipment, etc. this is IMPORTANT!  The FASB (Financial Accounting Standards Board) is proposing changes to leases that will affect your balance sheets.

Click on the link, accept the terms and download or view the PDF. 

Currently, a business puts a note in their financial statement that shows the next 12 months of lease payments coming due.  With the proposed changes, the business will need to capitalize the lease payments - in other words, show the liability.  It will affect current ratios and could impact your bank covenants, so please take a look at these proposed changes and consult your CFO, Accountant or tax advisor.

Note that we rent art and a true rental is not affected by these changes.  If you'd like more information on what constitutes a true rental versus a lease, send me an email:

Legal:  We are not tax advisers or accountants and are providing this link and these details for informational purposes only!

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