 This project’s intent is to address widespread concern that many lease
obligations are not recorded on the balance sheet and that the current
accounting for leases does not represent the economics of all lease
transactions. The FASB and IASB previously agreed that leases should be
recorded on the balance sheet, but have continued to discuss the
classification and pattern of expenses in the income statement. In a
decision reached June 13, 2012, the Boards decided on an approach in
which some lease contracts would be accounted for using an approach
similar to that proposed in the 2010 leases Exposure Draft and some
leases would be accounted for using an approach that results in a
straight-line lease expense. The Boards plan to release an Exposure
Draft in the Q4 2012; however, the leasing industry is a significant
business globally and it may provide political pressures that affect the
final standard. There are already political discussions being held that
could raise more questions on the proposed direction of this project.
One may expect the debate on this standard to continue to be heated as
entities examine the provisions and understand its application. More
insight will become available as to when to expect the final standard
once the re-exposed standard is posted and comments begin to come in,
but many speculate a final standard may be issued in mid-2013. Assuming a
2013 issuance, the earliest effective date is likely 2016. |
The AICPA offers guidance and training on the Lease Accounting Project, including:
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FASB and IASB Releases
The boards also maintain a project page with further information. (FASB, IASB)
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AICPA Guidance and Advocacy Releases
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