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Details

  • Type: Business and industry issue
  • Date: 9/18/2013

Counting the cost of the lease proposals 

When the IASB and FASB issued proposals for a major shake-up of lease accounting in May, KPMG questioned the cost of bringing leases on-balance sheet. Now, as the comment period closes, we have expressed our concerns to the Boards.

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.

KPMG comments on lease accounting proposals

Feature image
Comment letter on IASB Exposure Draft ED/2013/6 and FASB Proposed Accounting Standards Update (Revised), Leases.

© 2014 KPMG IFRG Limited is a UK company, limited by guarantee. All rights reserved. KPMG IFRG Limited, registered in England No 5253019. Registered office: 8 Salisbury Square, London, EC4Y 8BB

 

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