In their joint meeting in Norwalk, Connecticut this past week, the IASB and FASB reached the tentative conclusion that lessors will no longer derecognize leased assets. Instead, lessors will recognize a receivable and a performance obligation with revenue being recognized over time. Some think this approach is more consistent with the proposed new revenue recognition model, but that depends on whether you think a lessor has transferred control of the leased asset to the customer at lease inception. Regardless, it seems odd that a lessee will recognize an asset on its books which the lessor will also continue recognizing on its books. I guess we will have the opposite problem to what we have today. Instead of leased assets being on nobody’s books, leased assets will be on both party’s books. I wonder how this will affect debt ratios across industries and what kind of novel structuring opportunities the preparer community will come up with now.