After almost universal opposition in Europe to the proposed changes to the lease accounting rules, the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB) have made moves to ease the requirement for companies to put leases on their balance sheets, according to a report from Reuters.
Hans Hoogervorst, IASB Chairman, said: "We have started a re-deliberation and we expect to take the most important decision in March."
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Among the changes under consideration are to ditch plans to reform lessor accounting, and push back the start date for the lessee accounting change, according to Hoogervorst.
In addition, the board are considering changing from the two model approach, in which leases longer than a year were divided into two categories, one for property and another for high up-front cost equipment, to a single model.
One of the other considerations the board will make is how to reduce the cost of implementing the new rules. The current proposals would include small ticket items but Hoogervorst said: "We don’t necessarily want to see every coffee machine and photocopier on the balance sheet," and added the inclusion of such items may be limited in future proposals.
The proposed changes come soon after Leaseurope published a report in which they outlined the near universal opposition to the proposed changes in lease accounting standards and had been predicted by members of the UK’s Finance and Leasing Association in conversations with Leasing Life.
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By GlobalDataJacqueline Mills, director of asset finance and research at Leaseurope, said: "My impression is the Boards are not talking about major changes or concessions yet. And Leaseurope’s position remains the same."
