The application of new lease accounting standards is forcing companies to review their owned real estate, bringing measures addressing the risk of PBR falling below 1x into focus. The article does not provide specific figures or company names.
The application of new lease accounting standards is reportedly accelerating efforts by companies to review how their owned real estate is treated. Changes in the recognition and valuation of lease assets could affect the appearance of their financial statements.
As calls to improve PBR, or price-to-book ratio, continue, attention is focused on how changes in the rules governing owned real estate will affect companies’ financial metrics. The article reports that changes in the treatment of real estate could become a factor hindering PBR improvement.
Further reports are expected on the scope and timing of the rule changes and their impact on specific financial metrics, as well as on how individual companies are responding.