Chicago, IL –
BDO USA, LLP, one of the nation’s leading accounting and consulting organizations, and CoStar Real Estate Manager, a division of CoStar Group, Inc. and a leading lease management software provider, today announced a strategic alliance under which BDO and CoStar will team to provide companies with an end-to-end solution to meet the looming deadlines for compliance with new lease accounting standards
recently finalized by the U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).
The new standards require companies to recognize practically all obligations for real estate, equipment and other leased assets on their balance sheets. U.S. Securities and Exchange Commission data indicates that Fortune 500 companies currently have more than $700 billion in off-balance sheet lease obligations that will be affected by the new standards, while the IASB projects new balance sheet additions worldwide may be in excess of $3 trillion.
This significant shift in accounting policy may have far-reaching impacts in many areas such as debt covenants and financial ratios. It will affect businesses in numerous industries, especially those in the consumer products, restaurant, retail, financial services, utilities and oil & gas. By proactively preparing for the new standards, businesses can greatly mitigate financial reporting issues and negative consequences for errors and restatements.
“We are extremely pleased to work with CoStar in helping clients meet the challenge of complying with the new lease accounting rules. Although the standards do not take effect until after December of 2018 for public companies and after December 2019 for private entities, organizations must present prior periods on their financial statements and will need to adjust balance sheets retroactively for a period of two years before the effective date. This is an arduous and time consuming undertaking for businesses already suffering from compliance fatigue,” said Mike Stevenson, National Assurance Partner at BDO USA. “In order to make this transition less burdensome and meet compliance deadlines, companies need to take action now. By working with CoStar’s Lease Manager software and BDO’s technical expertise, companies can greatly accelerate the process of analyzing and classifying leases for the new requirements and bring them into compliance well before the deadline.”
CoStar’s proven Lease Manager software service provides the complete functionality needed to manage and report on real estate, equipment and other leased assets. It is delivered in a software-as-a-service (SaaS) format and offers out-of-the-box functionality that includes balance sheet impact, classification tests, amortization schedules, journal entry processing and GL system integration. To ensure compliance with Sarbanes Oxley’s requirement to demonstrate effective internal controls and procedures for financial reporting, CoStar’s platform completes an SSAE 16 audit annually.
“As a premier national accounting firm serving major multinationals, middle market companies, and emerging businesses, BDO is an ideal partner for our lease accounting solution,” said Andy Thomas, President of the CoStar Real Estate Manager division. “Leading-edge tools are only as good as the people who use them. BDO professionals are trusted advisors to their clients. The experience and insight they bring to the client relationship greatly enhances the impact of our Lease Manager solution.”
For more information on the new lease accounting standards, go to BDO Knows Leases
About BDO USA
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 60 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of more than 1,300 offices in over 150 countries.
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information, please visit: www.bdo.com
About CoStar Group
CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. LoopNet is the most heavily trafficked commercial real estate marketplace online with more than 10 million registered members. Apartments.com, ApartmentFinder.com and ApartmentHomeLiving.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Through an exclusive partnership with Move, a subsidiary of News Corporation, Apartments.com is the exclusive provider of apartment community listings across Move’s family of websites, which include realtor.com®, doorsteps.com and move.com. CoStar Group’s websites attracted an average of nearly 25 million unique monthly visitors in aggregate in the third quarter of 2016. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Canada with a staff of approximately 2,800 worldwide, including the industry’s largest professional research organization. For more information, visit www.costargroup.com
This news release includes "forward-looking statements" including, without limitation, statements regarding BDO’s and CoStar's expectations, beliefs, intentions or strategies regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the possibility that BDO’s and CoStar’s business plans change; the possibility that the number of off-balance sheet lease obligations affected by the new standards and new balance sheet additions differ from expectations set forth in this release; and the possibility that the results of CoStar’s SSAE 16 annual audit are not as expected. More information about potential factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including in CoStar's Annual Report on Form 10-K for the year ended December 31, 2015, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, each of which is filed with the SEC, including in the "Risk Factors" section of those filings, as well as CoStar's other filings with the SEC available at the SEC's website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements, whether as a result of new information, future events or otherwise.