4/20/2018 | By Nareit Staff
Serena Wolfe, partner at EY, participated in a video interview at Nareit’s REITwise: 2018 Law, Accounting & Finance Conference in Hollywood, Florida.
Wolfe noted that as Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) convergence projects near completion, REITs are faced with implementing standards relating to revenue recognition, leases and credit impairment.
According to Wolfe, the credit impairment standard will have an impact on how REITs prepare their financial statements.
“It is a huge change in the model whereby they don’t have to just look at historical losses, they have to forecast out what an expected loss might be…it's obviously very important for mREITs,” Wolfe said.
Meanwhile, Wolfe noted that there has been a heightened interest in non-Generally Accepted Accounting Principles (GAAP) measures by audit committees. She noted that audit committees want to understand the process and vigor that a company puts into compiling non-GAAP data.