NORWALK, CT—On Wednesday, the US Financial AccountingStandards Board and the International AccountingStandards Board will have another go at putting to bed aconverged standard for lease accounting. The meeting, scheduled forWednesday, April 24, follows a series of talks earlier this year that made some-buthardly enough-progress towards a resolution on this long-standingaccountings project.
According to FASB's announcement of the meeting's agenda on itswebsite, the Boards will discuss lease modifications and contractcombinations, variable lease payments, in-substance fixed payments,and the discount rate.
Left unresolved from the last talks in the March is theoverarching of question of whether there should be a singleapproach to recognize leases, or a duel-recognition approach,depending on the type of lease. With a dual approach, the leaseswould qualify as either Type A or Type B. The latter are mostlikely to be used by real estate companies, as it would allow for astraight-line expensing method with the asset returned to the ownerat the end of the term.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
