Saturday, March 21, 2009

Discussion paper released

The same day (March 19) as my previous post, wondering when the discussion paper on the proposed new lease accounting standard would be released, it was actually released. It's available now from the FASB or IASB (the copies vary because of the differences between American English and British English, a reminder of George Bernard Shaw's witticism that we're two countries separated by a common language). Anyone is welcome to comment to the boards (they request that you pick one board or the other, not both, to comment to) by July 17, 2009. The FASB permits sending comments to, File Reference No. 1680-100. The IASB has a web form for comments. All comments become part of the public record, available for viewing on the web. The boards also plan to have a live web presentation on the DP in May, with details to come.

The DP is over 100 pages; while the information is generally a restatement of the boards' decisions, it'll take me a day or two to look through the full text and post comments (not least because some big projects are on my plate right now). The FASB has also posted a press release about the DP. Predictably, not everyone is happy: the Equipment Leasing and Finance Association, the main US trade association for equipment lessors, issued a press release expressing concern about the complexity of the proposal and its potential to increase the cost of capital. In other words, they're afraid fewer people will lease equipment if they can't keep the transaction off the balance sheet. No doubt that's true, though I don't know how anyone can realistically estimate the magnitude of the effect.

WebCPA has an article on the DP.

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