At the Financial Accounting Standards Board (FASB) meeting on April 10, 2013, members voted 4-3, to re-expose the lease accounting standard. FASB Chairman Leslie Seidman was the deciding vote. Board members Tom Linsmeier, Marc Siegel and R. Harold Schroeder dissented.
The FASB had called a special meeting to discuss the “costs, benefits, and complexity associated with the guidance.” The new lease standard has long been one of the primary pieces of the FASB and International Accounting Standards Board (IASB) convergence project. The FASB’s revised draft is scheduled to be issued in May 2013, with the IASB’s scheduled for release in June 2013.
The proposed lease standard would result in all leases being recorded on the balance sheet. Additionally, it would result in dual expense-recognition for lessees if significant consumption occurs during the lease period. For example, the dual expense-recognition requirement could result in differences in recognition between equipment or vehicle leases and property leases.
As if users needed an extra element of complexity, aside from varying treatment for difference types of leases, the proposed standard will also result in disclosure of lease information throughout the financial statements, not in one single footnote.
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