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Description :
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The IASB and the FASB (the Boards) are jointly developing a standard that would be applied in accounting for lease transactions.
The aim of the project is to ensure that assets and liabilities arising under leases are recognised in the statement of the financial position.
The first step in this process was the publication of a discussion paper Leases, which was issued in March 2009. Click here for more information.
In August 2010 the IASB and the FASB published jointly an Exposure Draft on Leases. The proposed requirements would supersede IAS 17 in IFRS as well as replace IFRIC 4.
The Boards proposed a right-of-use approach under which the lessee recognises a right-of-use asset and a liability to make rental payments. Subsequently the right of use asset is measured at cost less depreciation and impairment and the liability at amortised cost.
The ED proposed an hybrid model for lessors, based on exposure to risks and rewards of the underlying asset.
In its comment letter, EFRAG expressed support for a right of use model, provided that the proposals identify a robust and operational distinction between leases and arrangements that are services.
As of March 2012, the Boards are nearing the completion of their redeliberations. They confirmed the right of use approach for lessees but made significant changes to the measurement requirements. Discussions are still ongoing on how to recognise the cost of the lease transaction in the lessee's statement of comprehensive income.
For lessors, they propose a single 'receivable and residual' accounting approach with accretion of the residual.
The effect of redeliberations until October 2011 is shown in the document below.
The Boards expect to publish a revised exposure draft in the second semester 2012.
For additional information, please consult the IASB project page.
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Working groups :
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EFRAG Technical Expert Group (EFRAG TEG) -
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Current Project Status :
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Final Comment Letter
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Efrag Output
Comment Letters
No 'Comment Letters'
Other Input
No 'Other Input'
News Items
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