Publication of the new lease accounting
standard has been delayed after 750 letters were received by the
International Accounting Standards Board in response to its
consultation.
The final standard, which had been expected in
Q2 2011, now may not appear until the end of the year, or
later.
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A high degree of consistency among the
comments in letters submitted during the consultation
period is thought to have encouraged the IASB to reconsider
significant aspects of the proposed standard.
Charlotte Lo, a KPMG manager said: “They are
talking more. They want to get it right, and not to issue it and
then change it, incurring costs.”
Common concerns raised in the consultation
included how to differentiate leases from services, complexities in
considering contingent rents and estimating lease terms, and impact
on the income statement.
Feedback specifically on lessee accounting
showed agreement with the right-of-use model, and concerns about
the cost versus benefit of the rules. On the lessor side, criticism
was around the difficulty in deciding which of two approaches to
use – either performance obligation or de-recognition.
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By GlobalDataRepresentatives from IASB and FASB, the US
standard setter, discussed a variety of topics about the standards
at a series of meetings in London in January. Pressure to introduce
the new rules by 2013, when the US applies international accounting
standards, appeared to have dissipated.
George Lynn, FLA board member for asset
finance and CFO of Angel Trains, said: “It was very encouraging.
Despite the validity of the theoretical arguments, there was
recognition of a need to assess the value of benefits to the users.
There remains a significant amount of work and thinking to be
carried out by staff on major aspects of the exposure draft.
“There does appear to be a growing degree of
common sense and recognition of the real practical issues, and of
the responsibility not to overburden lessees and lessors with
excessive work.”
The meetings covered a variety of topics,
indicating that parts of the standard could be revised. Issues
being reconsidered included ensuring that there is only one
approach for accounting for all leases – de-recognition.
