Lease Accounting Standards Update
The comment period on the latest lease accounting exposure draft released by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) ended on Friday, September 13.
BOMA International, along with 22 other organizations, submitted comments on the May exposure draft issued by the Financial Accounting Standards Board and the International Accounting Standards Board proposing changes to the current lease accounting standard. The coalition is primarily concerned that the draft leasing standard will make financial reporting more complex; impose substantial costs on businesses; fail to provide any benefits for investors; and drive economic activity, rather than reflect it. Among other things, the May exposure draft adopts a “dual-track” approach, which requires real estate lessors and lessees to recognize rental income on their balance sheets on a straight-line basis. In addition, lessees would be required to recognize assets and liabilities related to their leases (other than certain short-term leases) on their balance sheets.
BOMA International, along with 22 other organizations, submitted comments on the May exposure draft issued by the Financial Accounting Standards Board and the International Accounting Standards Board proposing changes to the current lease accounting standard. The coalition is primarily concerned that the draft leasing standard will make financial reporting more complex; impose substantial costs on businesses; fail to provide any benefits for investors; and drive economic activity, rather than reflect it. Among other things, the May exposure draft adopts a “dual-track” approach, which requires real estate lessors and lessees to recognize rental income on their balance sheets on a straight-line basis. In addition, lessees would be required to recognize assets and liabilities related to their leases (other than certain short-term leases) on their balance sheets.
The final rule could be decided sometime next year, but implementation most likely would not take place until 2017.
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