On May 16, 2013, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB, or together with the FASB, the boards) issued a revised exposure draft on the accounting for leases (the revised ED). The deadline for the submission of comment letters was September 13, 2013 and the reaction is mixed.
Respondents are generally supportive of recognizing lease assets and liabilities on the balance sheet, but expressed concerns with the complexity and potential application issues associated with distinguishing between two different types of leases. In addition, a number of respondents were dissatisfied with the entire project and question whether the proposals reflect an improvement on the current guidance.
There will certainly be more to come over the next several months as the boards consider the responses. In the meantime, we have prepared this Power and Utilities Alert to highlight the key issues that the revised ED has this industry talking about.