The US Financial Accounting Standards Board (FASB) decided to move forward with re-exposing its lease accounting standard in line with that of the International Accounting Standards Board (IASB).
The decision follows a vote on 10 April during which FASB chairman Leslie Seidman cast the deciding vote in a 4-3 decision to push the US GAAP leases exposure draft through.
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The proposed leasing standard will now require a dual expense-recognition approach for lessees, depending on whether significant consumption occurs during the lease period.
This means leased items that tend to depreciate during the life of a lease would be now be accounted for differently from leases that do not tend to depreciate over time.
However, one of the main criticisms from some the board members which voted against the re-exposure was the new system is "too complex" as well as there still being little consensus over a number of issues.
Seidman added the FASB had put a lot of effort into developing the new proposals, and had worked "tirelessly" with the IASB and said the board is prepared to put significant effort into a third round of comments, outreach and deliberation in order to put the final touches on the proposal.
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By GlobalDataThe re-exposure draft is expected to be issued in mid-May.
This story was originally reported on The Accountant
