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Could commercial property costs be affected by new UK accounting rules?

July 16th 2012

On July the 13th Instant's Finance Director, Charlie Vitty, had an article published on the Finance Director website, with coverage in the full FD magazine to follow in August. The article addresses new UK lease accounting rules that are expected to be implemented from 2013, which could remove the distinction between financing and operating leases. This will mean an end to off balance sheet accounting.

While nothing is yet set in stone, it's important to note that flexible office solutions are highly likely to remain categorized as an operating cost. This is because of the relatively short term nature of the contracts, meaning that they can be counted neither as a liability or as an asset.

It's been suggested that up to 54% of UK businesses are not yet aware of how this change in legislation will affect their books. Charlie recommends keeping up to date with proposals, and suggests making your key stakeholders aware of how changes might affect important company ratios.

You can read the full article here.

Charlie Vitty can be contacted by email or by telephone: +44 (0)20 7298 0600.

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