The Accounting Standards Board (ASB) has completed its consultation on the proposed changes to the way that leases are shown in company accounts.

According to Michael Brandman of Tarlo Lyons Solicitors the proposals will have a major impact on the negotiation of lease terms - particularly the length of the lease. Under the proposals, the payments owed for the entire length of the lease will have to be shown as liabilities on an organisation's balance sheet, resulting in a significant imbalance between assets and liabilities. Currently, only the payments owed in the current year are shown as liabilities.

Writing in the forthcoming issue of Facilities Management Legal Update, Michael Brandman argues that facilities and premises managers will benefit from an understanding of the new proposals, unless they want accountants to be involved every step of the way.