ATLANTA—In May 2013, the Financial Accounting Standards Board and the International Accounting Standards Board issued a revised exposure draft of their proposed changes to lease accounting rules. The revised draft came nearly three years after the original exposure draft, which conveys some sense of how long the two groups have been working on this project.

With such a protracted time frame, it may have seemed to many that the brave new world of lease accounting would never actually become reality. Yet as FASB and IASB edge closer to completing the new accounting regimen, Sean Moynihan, Gary Hubbard and other experts at Avison Young warn that the effective date of the new rules—2018—is closer than it seems, and the time to begin preparing is now.

“While the exact details of the proposed lease accounting standard will be subject to ongoing refinement, the broad requirements have become more defined—and there are many things that real estate lessees and lessors can, and should, be doing today with respect to their lease structures, business operations and financial reporting processes,” says Hubbard, AY's Chicago-based CFO. “By planning and starting early, companies can more effectively manage the process and minimize the surprises.” More to the point, Atlanta-based AY principal Sean Moynihan warns that “many companies will be blindsided in '18 if they don't prepare now.”