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Amazon Entertainment

Co-Working Startups Eye New Growth Driver: Accounting Change

Co-working firms like WeWork have historically relied on sleek office designs and amenities like beers on tap to bring in new business. Now, they are turning to an arcane accounting change as a way to rent space to more big companies.

A new accounting rule due to go into effect by 2019 will force public companies to disclose office leases on their balance sheets. Because it will increase companies’ reported liabilities—potentially making their financial position look a little less healthy—the pending rule is prompting finance executives to re-examine how much leased real estate they really need.