In May, 2013, the FASB and IASB issued a revised exposure draft pertaining to lease accounting (the “revised ED”). This edition discusses the new guidance and the impact it will have on banks.
In May, 2013, the FASB and IASB issued a revised exposure draft pertaining to lease accounting (the “revised ED”). The revised ED retains the previously proposed “right of use” concept with lessees and lessors reflecting all leases (except short-term leases) on their balance sheet. Some lessors will de-recognize the underlying asset, while others will continue to include it on their balance sheet.
Although the banks acknowledge that the proposed guidance includes a number of practical improvements from the 2010 proposals, they remain concerned that the proposed guidance is overly complex and does not meet the objective of improved financial reporting (especially for lessors).