Just doing some background reading on BT Group plc Annual Report 2005and found the the following note on United States Generally Accepted Accounting Principles. I think it is of interest to property investors. I believe the NZ rules are similar to the UK rules in this instance
From p113
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(a) Sale and Leaseback of Properties
Under UK GAAP, the sale of BT's property portfolio is treated as a fixed asset disposal and the subsequent leaseback is an operating lease.
Under US GAAP, the transaction is regarded as financing and the land and buildings are recorded on the balance sheet at their net book value., an obliagtion equivalent to the cash proceeds is recognised and the gain on disposal is defered until the properties are vacated by BT.
(To convert accounts from NZ GAAP to US GAAP) rental payments paid by BT are reversed and replaced by a finance lease interest charge and a depreciation charge.
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Why is this of interest? It measn that companies that set out to square up their balance sheet by selling off properties and leasing them back (RBD, BRY come to mind) are effectively not allowed to do it if they were operating in the US!
SNOOPY