04/22/2014 | By Mitch Irzinski
Nancy Anderson, vice president of financial reporting and chief financial officer with the Real Property Association of Canada (REALpac), joined REIT.com for a video interview during REITWise 2014: NAREIT’s Law, Accounting and Finance Conference held in Boca Raton, Fla.
Anderson discussed the current overall health of the commercial real estate market in Canada.
“It’s fair to say it’s pretty stable and steady,” she said. “There’s low volatility right now in the Canadian economy. We do see fairly healthy demand in most property sectors and markets, so that’s good. Some would say that there’s a little too much being built in office, but we’ll wait and see, because companies are downsizing in terms of square footage for employees. In retail, Canada seems to be very attractive right now to U.S. and European retailers, but that depends on interest rates and customer confidence.”
Anderson also shared her view regarding global convergence of financial standards.
“Canada is already converged, so the Canadian perspective is really watching to see what else is happening,” she said. “The big countries to watch, I think, are the U.S. and Japan. I don’t think Japan is ready to converge right now. In the U.S., there’s big convergence projects going on – revenue recognition is about to come out, so that’s good, financial instruments and leases is maybe not going as well in terms of convergence. So we’re seeing things not where we’d ultimately like them to go, because we would like to see convergence overall.”
Anderson shared her opinion concerning the biggest financial reporting issue for Canadian real estate companies.
“There is a very current, hot topic, and it has to do with our leases standard,” she said. “There was an IFRS (International Financial Reporting Standards) interpretations committee meeting about an issue with capitalization of certain internal costs – we think they should be capitalized, in the U.S. they are capitalized, and apparently that’s not the result they got to. So, that’s causing us a bit of grief right now, trying to figure out what we’re going to do about that. “