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.
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