We continue to support the Boards’ objective to develop a single, less complex approach to lease accounting and the broad principle that assets and liabilities arising under leases be recognised on a lessee’s balance sheet.
We consider that the Boards’ extensive work on this project has identified diverse perspectives on what a lease represents and how it ought to be reflected for financial reporting purposes.
However, we do not believe that they should finalise a standard based on the current proposals. Bringing leases on-balance sheet should not be seen as an end in itself, to be pursued at any cost. We feel that the current proposals do not represent an improvement over current GAAP, will not satisfy users, and will not justify the costs of implementation and ongoing application. Change for the sake of change does not necessarily equate to progress.