While the goal of eliminating lease accounting as a source of off-balance sheet finance has been achieved, the costs of achieving this goal include complexity and conceptual compromise.
Proposed lease accounting changes could affect almost all reporting entities.
- On-balance sheet approach for lessees
- “Dual” model for income/expense recognition
- Increase in complexity for lessee and lessor accounting
The proposals are certain to prove controversial and initial reaction from some user groups has been cool.
A revised exposure draft is expected in the first quarter of 2013, most likely with a 120-day comment period.
Please contact your KPMG Accounting Advisory Services adviser for more information.