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18 April 2011

Leaseurope welcomes extended time for completion of new lease accounting standard by IASB/FASB


Leaseurope welcomed the recent announcement from the IASB and the FASB that the standard setters will be taking more time to develop the new international lease accounting standard.

The Leases standard was originally due to be completed together with the other so-called convergence projects of the Boards by June this year. However, following requests from many of the Boards’ constituents, including the Monitoring Board of the IFRS Foundation as well as the global leasing industry, this timeline has now been pushed back to the end of 2011 to coincide with the G20’s target deadline for the completion of convergence projects.
 
When the IASB and FASB issued a draft Leases standard for comment last year, they received around 800 comment letters, the vast majority of which expressed significant concerns about the cost/benefit balance of the proposals. “Although the Boards had begun to consider how to adapt their proposals in response to this feedback, there were concerns that they simply would not have the time to resolve the many outstanding issues identified and produce proportionate, high quality accounting requirements for leases”, explains Jukka Salonen, Chairman of Leaseurope. “The Boards’ acknowledgement that more time is needed is therefore a clear signal they are listening to these concerns. It is important that they focus on getting the new standard right rather than on trying to meet a June deadline at all cost.”
 
Leaseurope has pointed out that it is necessary for the Boards to consult widely on their revised proposals to ensure that the final Leases standard is robust and withstands the test of time. With the unnecessary time pressure of June now gone, this will be possible. Leaseurope is expecting the Boards to release further details on their re-deliberation and consultation plans shortly. Leaseurope will continue to play an active role in this process to make sure that the leasing industry's viewpoint is reflected in the final standard.

Leaseurope is also pleased to note that the Boards have reassured their constituents that there will be ample time between the finalisation of the Leases standard and its effective date. Indeed, this is crucial for the industry and its clients to be able to understand the new requirements and prepare for implementation.

Press release


© Leaseurope

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