Tuesday, September 7, 2010

Putting your 2 cents in

The FASB & IASB are inviting all lessees and all lessors to fill out an online survey asking about your leasing activity. The lessee survey is available here; the lessor survey is here. This is not the same thing as submitting a comment letter on the Exposure Draft (for details on submitting that, see my prior blog post). This survey does not require any knowledge of the Exposure Draft, and only limited knowledge of lease accounting in general, for that matter. It's available through the end of September 2010.

I went through the lessee version of the survey. The boards estimate 20 minutes to fill out the survey, but most people can probably fill it out more quickly than that. The survey asks about your volume and type of leasing activity, including what percentage of your leases are operating (within ranges). It asks whether you have leases with options to renew/extend or to purchase, and leases with contingent rents; for each, it asks whether you have few or many such leases, the reason(s) your leases have such features, and whether you currently reassess them after the lease starts.

It asks if you're familiar with the new lease accounting proposals, and you easy you expect it to be to determine contingent rentals, contracts that are leases, expected lease term, incremental borrowing rate, and distinct services, and to provide required disclosures. At the end of the survey, there is space for comments, and an option to make yourself available for a fieldwork project, which entails a “limited conversion of financial information in line with the proposals, and presenting those in workshops with the boards.”

This survey provides a way for the boards to get a large number of lessees and lessors to provide information about their current leasing activity and what the impact of the proposed standard might be. The more people respond, the better the information is for them to work on. So if your company has leases, either as lessee or as lessor (or both), please consider taking a short bit of time to fill out the survey. Presumably the results will be released at a future date, to be part of the boards' deliberations after the Exposure Draft comment period ends on Dec. 15, 2010.

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