OUR THOUGHTS ON:

FASB Meeting on Lease Standard Looming

Audit

By Todd Lucas

For years we have been hearing of the coming changes to the lease accounting standard. The Financial Accounting Standards Board (FASB) has been revising its lease accounting standard since the original draft standard was issued in August 2010. A revised draft is expected to be issued during the second quarter of 2013. However, this could all change very soon.

On April 10, 2013, the FASB has scheduled a meeting to discuss the “costs, benefits, and complexity associated with the guidance.”

Not surprising, the FASB has continued to hear objections from organizations such as the Equipment Leasing and Finance Association (ELFA). In a letter to the FASB, William Sutton, President and CEO of ELFA, wrote the following “It does not provide incremental information beneficial to a cross-section of users (of financial statements), and it involves costly and complex accounting analysis and calculations, which we do not believe are commensurate with the benefits to users of financial statements.”

The FASB has encountered resistance on the issue of leases in the past; however, there now seems to be stronger movement, in the United States and abroad, against the proposed lease standard. As a new lease standard has been one of the primary pieces of the FASB and International Accounting Standards Board (IASB) convergence project, we may have a clearer picture of the lease standard, and potentially the convergence overall, after tomorrow’s meeting.

© 2013 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

comments