Consensus for Leases is Difficult to Find

I’m going into my last week as a FASB Research Fellow.  The past year has been very educational for me as I’ve observed up close the process that the Board goes through in promulgating standards.  I’ve developed a better understanding as to why some projects proceed at a painstakingly slow pace.  I’ve also gained a [...] Read more > >

Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 6)

(Previous Posts: Part 1, Part 2, Part 3, Part 4, Part 5) Here is the sixth 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 provides additional evidence that the “Interest and Amortization” (I&A) model (formerly known as “Approach A” [...] Read more > >

FASRI Roundtable: FASB Projects on Leases

On July 24, FASRI will host a Roundtable on the latest developments for the FASB/IASB joint project on leases.  Leasing is a significant source of financing in the economy, but the current capital/operating lease accounting treatment has long been criticized as not meeting the needs of financial statement users and resulting in non-GAAP adjustments by [...] Read more > >

Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 5)

(Previous Posts: Part 1, Part 2, Part 3, Part 4) Here is the fifth 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 focuses on the significant implications of Approach Y’s terminology, i.e., the specific words and phrases that are integral [...] Read more > >

Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 4)

(Previous Posts: Part 1, Part 2, Part 3) Here is the fourth 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 summarizes the structural aspects of financial-statement presentation and disclosure under Approach Y and three other approaches. The summary supports the [...] Read more > >

The IASB and FASB Decide on Lease Accounting

The IASB and FASB are meeting in London this week where leases is on the agenda.  At the meeting, the Boards proposed a standards update that will require all leases with a term in excess of one year to be capitalized on the balance sheet.  No surprise there; that has been the Boards’ position since it released [...] Read more > >

Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 3)

(Previous Posts: Part 1, Part 2) Here is the third 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 evaluates the conceptual bases of Approach Y and three other approaches with regard to subsequently measuring right-of-use (RoU) assets. The results of this evaluation [...] Read more > >

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 [...] Read more > >

Introducing “Approach Y”: A Better Lease-Accounting Model for Lessees (Part 1)

To date, the Financial Accounting Standards Board (FASB), the International Accounting Standards Board (IASB), and the Boards’ constituents have not reached a consensus on how lessees should account for leases. Several approaches to lessee accounting have been identified and debated, but so far none of them has been widely embraced as the clear solution to [...] Read more > >

Update on the Leases Project

When I first arrived at the FASB, my expectation was that the Leases project was winding down and we might have a final standard before I left.  This was also what the FASB website indicated.  How things have changed!  After an Education Session a couple of weeks ago and the joint IASB/FASB Board Meetings this [...] Read more > >