NAREIT Submission to FASB on Delay of Standard for Derivatives Instruments and Hedging Activities
June 14, 1999
Mr. Timothy S. Lucas
Director of Research and Technical Activities
Financial Accounting Standards Board
401 Merritt 7
P.O. Box 5116
Norwalk, CT 06856-5116
RE:Proposed Statement of Financial Accounting Standards - Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133
Dear Mr. Lucas:
The National Association of Real Estate Investment Trusts (NAREIT) is pleased to have the opportunity to respond to the Financial Accounting Standards Board's ("the Board") proposed deferral of the effective date of FASB Statement No. 133. NAREIT is the national trade association for publicly traded real estate companies. Members include real estate investment trusts (REITs) and other businesses that develop, own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service these businesses.
The business of developing, owning and operating income-producing property often involves the use of derivative instruments and hedging activities. In this context, the policy governing the accounting for these transactions is important to producing useful financial reports for publicly traded real estate companies.
NAREIT supports the Board's proposal to delay the effective date of the standard to all fiscal quarters of all fiscal years beginning after June 15, 2000. We agree that the complexities associated with the provisions of the standard, combined with the year 2000 issue, result in the need for more time to study and understand the standard, as well as to make related information system modifications. This will provide organizations additional time to implement educational efforts focused on those that prepare and use financial statements.
Stephen C. Richter
Treasurer, Weingarten Realty
Co-Chair, NAREIT Accounting Committee