March 03, 2011 12:12:39 pm
FASB Reconsiders Leasing Structures
It looks as if the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are reconsidering their respective positions on the categories of operating leases and capital leases.
The two boards have agreed to take a look at a system where “finance leases’ would be treated like an installment purchase, putting an asset on the balance sheet as well as a liability to be paid down over time. ‘Other-than-finance’ leases would also appear on the balance sheet, but would flow through the income statement like today's operating leases because the financing element would not be considered significant” according to a recent article posted on Complianceweek.com.
Additionally, the two boards are reviewing their positions on the accounting for renewal options and other variable lease payment scenarios.
For more insight on these new leasing structures, contact REDW’s Steve Cogan or Ray Ziler.
Tags: Audit, Accounting Standards
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