Private and nonprofit organizations faced a tall order in February 2016. That’s when the Financial Accounting Standards Board issued new accounting standards requiring lessees to report real estate liabilities on their balance sheets. The standard was set to take effect by mid-December 2019, but FASB issued a one-year extension in October that gives such companies more time to compile, understand and calculate leasing data. The original deadline will remain unchanged for large public banks. As an article published by BOMA International explains, over 85% of lease commitments aren’t listed on corporate balance sheets. Once the new standard kicks in, any equipment or real estate lease with a term longer than 12 months must be recorded on the balance sheet as a “right-of-use” (ROU) asset with a corresponding lease liability. The standards won’t change landlords’ operations much, but tenants will demand improved transparency in their lease agreements. The impact will be especially dramatic for retailers, chain restaurants and other sectors that rely heavily on leasing for their operations. The new reporting requirements will force companies to be more rigorous in recording leasing data and the types of information that must be tracked. “Transparency around contract details will be critical,” according to Stephen Miller, global lease accounting lead for JLL and author of the BOMA article. One key change requires renewal options to become part of lessees’ reported liability if a company is reasonably certain it will exercise its option to renew. Shorter leasing terms will reduce reported liabilities, and operating and service contracts will be excluded from balance sheet calculations. Some experts calculate that corporate debt loads will increase by an average of 58% under the new rules. Rising debt loads elevate a company’s overall financial risk and can set off alarms with investors and...

As an operator of a coworking space, you’ll have many choices when selecting a management platform to power your shared workspace. Compare pros and cons and check what features each choice provide, but make sure these five features are included in your software. Robust Accounting Accounting is a vital component to the operation of your space. You may choose a software that integrates with third party applications such as Quickbooks, FreshBooks, or others. That is a significant step up from manual labor. In a perfect world however, your management platform would have all accounting solutions built in. This will eliminate third party apps for accounts payable, payment processing, merchant services, and reconciliation, among other functions. ILS There are numerous benefits to having an ILS (internet listing service) built into your coworking management software. List your space and eliminate marketing time and dollars. Potential members can check out your space at a glance, and improve the quality of your leads. In addition, you will greatly benefit from the ability to sell your services online in real time. Offer spaces, services, and just about anything else you can list. Keep track of sales and revenue live. Real-time Reporting Real-time reporting goes beyond just statistics. Being able to track data and results live will help you track sales, revenue, space usage, and many more driving factors of the success of your space. At the end of the day, the goal is to increase your revenue and provide better service to your members and guests. Real time reporting is at the core of all those goals, as you’ll have visibility to change membership plans, designs, and service based on tracking data over periods of time. Learn more about the benefits of CRM and automated booking in your coworking management software on the...

As an owner, you wear many hats and have many strengths. If interpreting reports is not among your talents, you’re not alone. Many leaders aren’t getting the most out of team updates because they are not comfortable with the terms used on the reports. A brief refresher may do the trick! Below is a quick cheat sheet of nine common ratios that you will encounter and how to interpret them. Capitalization Rate (Cap Rate) When you are just getting started with a property, cap rate comes in handy. The cap rate tells you the actual value of an investment beyond its appraisal value. To find the cap rate: Cap rate = sales price of a comparable income property ÷ net operating income of comparable income property Net Operating Income (NOI) NOI is also used to determine the value of a property. It uses data from the previous year to account for the loss of rental revenue due to vacancies, maintenance and other factors. To find the NOI: Net operating income = gross operating income – (operating expenses ÷ gross income) Market Value Your cap rate and net operating income can then help you to understand your market value. This will change over time based on several factors. To find market value: Market value = net operating income ÷ capitalization rate Vacancy Rate This is undoubtedly a figure that you will refer to often. The vacancy rate is the number of unoccupied units compared to the number of units available for rent. A lower number is better than a higher number. To find the vacancy rate: Vacancy rate = number of unoccupied units ÷ total number of units Occupancy Rate Another common ratio used to understand the quantity of available units is occupancy rate. To find the occupancy rate: Occupancy Rate...