FASB and the International Accounting Standards Board (IASB) announced Thursday they intend to re-expose their revised proposals for a common leasing standard.
Re-exposing the revised proposals will provide an opportunity for comment on revisions the boards have made since the publication of an exposure draft on leasing in August 2010.
“During our discussions of the extensive comments we received on the exposure draft, the boards have reaffirmed the major change to lease accounting, which is to report lease obligations and the related right-to-use on the balance sheet,” FASB Chairman Leslie Seidman said in a news release. “However, the boards decided to make many other changes to address the comments made by stakeholders.”
Even though the boards have not completed their deliberations, the decisions taken to date were sufficiently different from those published in the ED to warrant re-exposure of the revised proposals, the IASB’s new chairman, Hans Hoogervorst said in a news release. “The direction of travel indicates that there are aspects of our revised proposals that would benefit from additional input from interested parties.”
Further details about the new proposals will be available shortly from the leases project sections of the IASB and FASB websites, according to the two groups. The boards intend to complete their deliberations, including consideration of the comment period, during the third quarter of this year with a view to publishing a revised ED soon afterward.
Last month, the boards announced plans to re-expose proposals during the third quarter on another major convergence project – revenue recognition.
The August 2010 lease exposure draft called for bringing lease obligations and the related assets onto the balance sheets of lessees. The proposals for lessors were designed to ensure that an entity that retains significant risks or benefits of the leased asset would recognize that asset and an associated obligation to allow the lessee to use the asset. In other cases, when the significant risks or benefits of the leased asset are transferred to the lessee, the lessor would derecognize the portion of the asset that is transferred by the lease agreement.
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