Will more follow Northrop’s lead and buy vs. lease?
Proposed accounting change drove contractor’s departure from the norm By David HublerAug 24, 2010 Northrop Grumman Corp. will soon relocate its long-time Los Angeles headquarters to a 14-story building in Falls Church, Va., which the company recently purchased from ING Office Fund for a reported $78.6 million in cash. Other federal contractors could follow Northrop’s lead, opting to buy rather than take the more conventional leasing route, if a proposed accounting rule change takes effect around 2013. The accounting change – a joint proposal of the Federal Accounting Standards Board which issues regulations under the Generally Agreed Accounting Principles (GAAP) and the International Accounting Standards Board – would change the way leases can be accounted for on corporate financial statements. Under current accounting practices, most companies record their leasing costs as an expense but not as a liability, according to the Real Estate Roundtable, an industry advocacy group in Washing
Proposed accounting change drove contractor’s departure from the norm By David HublerAug 24, 2010 Northrop Grumman Corp. will soon relocate its long-time Los Angeles headquarters to a 14-story building in Falls Church, Va., which the company recently purchased from ING Office Fund for a reported $78.6 million in cash. Other federal contractors could follow Northrop’s lead, opting to buy rather than take the more conventional leasing route, if a proposed accounting rule change takes effect around 2013. The accounting change – a joint proposal of the Federal Accounting Standards Board which issues regulations under the Generally Agreed Accounting Principles (GAAP) and the International Accounting Standards Board – would change the way leases can be accounted for on corporate financial statements. Under current accounting practices, most companies record their leasing costs as an expense but not as a liability, according to the Real Estate Roundtable, an industry advocacy group in Washing
