REALpac CFO Provides Update on International Accounting Projects

Nancy Anderson, vice president, financial reporting and CFO at REALpac, participated in a video interview at REITwise 2018, Nareit’s Law, Accounting & Finance Conference in Hollywood, Florida.

Anderson is a member of the Accounting Standards Board of Canada. She said her role there will benefit the global REIT industry as she will be able to hear what other stakeholders think about standards that are being developed and implemented. When topics come up that impact the REIT industry, “I might have the opportunity to provide additional comments and thoughts on what our viewpoint is,” she said.

Anderson also noted that the Real Estate Equity Securitization Alliance (REESA) has provided comments on the International Accounting Standards Board’s (IASB) Principles of Disclosures Project. She also noted that the IASB has started to make some decisions regarding its Primary Financial Statements Project, which they will issue for public comment.

As part of these projects, the IASB is considering the inclusion of non-GAAP measures in the financial statements. Anderson pointed out that there are already REITs that report in accordance with International Financial Reporting Standards (IFRS) that include net operating income (NOI) in their financial statements.

“They may not exactly call it that but it’s clearly that,” Anderson said. As long as there’s nothing in the project that will prohibit that, she said she expects the practice to continue.

As for the treatment of funds from operations (FFO), Anderson said it depends on how the IASB intends to define a management performance measure. “I think we have to wait and see what happens with that.”