There may be a variety of leases you depend on to run your business in Nashville. Office space is the least of it; you may also be leasing a vehicle, piece of equipment, furniture, or another type of asset.
If you plan on entering more leases in the foreseeable future, check in soon with your trusted accounting firm. A new regulation on leasehold accounting, IFRS 16, will take effect in January 2019. It can potentially impact your business in the long run and day to day.
What is this new regulation?
To date, companies must classify their leases either as finance or operating. In a finance lease, the asset remains owned by the lessor throughout the lease period (as with anything rented). In an operating lease, the asset could be eventually transferred to the lessee (as with a loan). As such, operating leases are counted simply as expenses, while finance leases can be considered assets or liabilities—items that must be listed in a balance sheet.
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