A senior figure at the International Accounting
Standards Board (IASB) has said it is confident that a revised
draft of its delayed lease accounting rule has allayed the main
concerns of the leasing industry.
The IASB hopes to publish the final version sometime next
year.
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The London-based standard setter said it has
tried to make its lease accounting rule, which will put leases on
corporate balance sheets, simpler and less onerous and costly to
comply with, in response to concerns from businesses.
The accounting rule is likely to come into
force after 2014 or 2015, although the IASB board hasn’t made a
decision on the date.
However, the IASB official, who asked to
remain anonymous, has said that it may make more changes to its
latest draft which is due to be published next month, depending on
the response from business.
When the IASB published its first draft of the
lease accounting standard in August 2010 it attracted nearly 800
comments – many of them critical.
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By GlobalDataConcerns included how to differentiate leases
from services; complexities in considering contingent rents and
estimating lease terms; and the impact of lease accounting on the
income statement.
“We are publishing another exposure draft,
which includes all the changes to the consultation so that people
can see the changes in context and if we have left anything major
out,” the IASB official told Leasing Life earlier this
week. “It’s possible to make further changes.”
The final version of the accounting rule,
which will put an estimated $1 trillion (€707bn) of leased assets
on corporate balance sheets, was originally due to be published in
June.
In April, however, the IASB and its US
counterpart from the Financial Accounting Standards Board (FASB)
said that it would push the deadline back to the end of this year
to give them more time to get the standard right.
Although leasing industry bodies welcomed the
decision to delay publication of the standard there has been some
frustration in the industry about being unable to plan for the
accounting rule because it hasn’t been finished.
The IASB official defended its decision to
delay publishing the final rule. “If people are frustrated because
[the lease accounting rule] hasn’t been completed I think they
would have been more frustrated if we pulled the trigger too soon.
If we went too fast there would be more frustration.”
The latest draft for lease accounting includes
some significant changes, according to the IASB. Key changes
include a clarified definition of lease and rental contracts and
“significant” change to the accounting system for lessors, moving
from a dual to a single accounting model, the
IASB said in July.
