FASB and IASB also changed their previously proposed method for calculating the term of the lease. In the August exposure draft, they proposed including renewal options that were more likely than not to occur, as well as contingent rent payments. "They're now defining it as the contractual term of the lease, unless the lessee has a significant economic incentive to renew the lease," says Vivian Mumaw, global leader of lease administration with Jones Lang LaSalle Americas Inc. At this point, the Boards haven't clarified their definition of a "significant economic incentive," she adds.

The Boards also identified the costs that should be included within the asset value recorded on the balance sheet, Mumaw said. The amount doesn't include operating expenses, such as utilities, nor does it include rental payments that are contingent on sales. It does include any rent increases known at the outset, as well as costs that are integral to the lease transaction, such as legal fees.

Although the latest iteration of proposed lease accounting rules has limited the expenses that will go into determining the value of a lease, companies still will have higher levels of liabilities on their balance sheets. "That's the kicker. When you look at companies under the new lease proposal, they're going to look more highly leveraged," says Sam Johnson, partner with the accounting firm of Cherry, Bekaert & Holland LLP. Shorter-term leases, which will mean a smaller liability on the balance sheet, might be more attractive in some cases, he says.