Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 2)
(Previous Posts: Part 1)
Here is the second in a series of working papers that I am preparing to explain “Approach Y”—a lease-accounting model for entities that are lessees. The new working paper, which compares the measurement outcomes of Approach Y and other approaches, is attached. Also attached is the Excel file to which the new working paper refers.
Attachments
Approach Y – Working Paper 2 (PDF)
Approach Y – Comparison of Approaches – Measurement (Excel)
I welcome your feedback on the new working paper and Excel file. I also invite you to watch for my additional working papers comparing various approaches with regard to their actual and perceived concceptual bases, presentation/disclosure aspects, and other dimensions. Also forthcoming is a working paper on the scope of Approach Y’s applicability to different kinds of leases.
Bruce,
Nice contribution. Your two posts provide a very clear explanation of the differences contained across the different approaches that have been considered by the Boards. This should be very good material for people to use in the classroom, and I have alerted the FASB staff to your posts.
Lynn,
Thanks for your comment. Please see my followup post (Part 3) here. Attached to it is a third working paper that evaluates the conceptual bases of Approach Y and three other approaches with regard to subsequently measuring right-of-use (RoU) assets. The results of the evaluation support the conclusion that Approach Y has a better conceptual basis for the subsequent measurement of RoU assets than any of the other three approaches has.