From TRIRIGA Insights:
The spotlight on leases will extend to those who are involved in managing or accounting for the real estate portfolio. As lease obligations become more visible, investors will begin to ask questions about how lease obligations are managed and company executives will direct these questions to corporate real estate departments.
The new attention paid to corporate real estate will deliver a mixed blessing. The questions asked by investors and executives may be hard–hitting and difficult to answer. At the same time, the corporate real estate function will gain new–found respect from senior executives and some corporate real estate executives will be included in top strategic discussions related to company cost–structure and profitability. Moreover, those involved in corporate real estate will find a host of new responsibilities and challenges including the following:
- Rethinking strategy
- Reformulating budgets
- Communicating the implications of the new accounting to stakeholders
- Creating and managing processes to comply with the new standard.