Build-to-Suit Construction Adds Complexity to Lease Accounting

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Companies that undertake construction projects in conjunction with leases should be careful of the accounting effects, PricewaterhouseCoopers’ Chad Soares says. Certain projects must be included as an asset on a lease-holder’s balance sheet, depending on how involved it is with the project. "If a lease involves an asset that will be constructed, special rules exist," Soares says.

During a recent webcast covering a variety of accounting issues, PwC Partner Chad Soares reminded companies that there are unpleasant balance sheet implications to beware when entering into build-to-suit lease agreements.

Further details are available on this article posted on Compliance Week.

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