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New Lease Accounting Influences Northrop Grumman to Buy HQ July 21, 2010

Posted by Bob Cook in Corporate HQ, Financial Planning & Analysis, Lease Accounting.
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Soon-to-be HQ

Today, The Wall Street Journal announced its “Deal of the Week” to be the Northrop Grumman purchase of a new headquarters building in Falls Church VA.  In “Northrop Is Flying East”, the WSJ writes that the company “looks to have gotten a pretty good deal” but that “Northrop also took into consideration the low cost of borrowing money and proposed new accounting standards that could make it less advantageous to lease real estate” (emphasis added for this post).

It is, of course, no coincidence that I’ve been proselytizing on the impact of the new accounting and that Northrop is one of my consulting clients.

Expect to see more such transactions from other companies as the impact of the accounting standards become clearer to those in corporate real estate.

Read more posts about lease accounting here.