Ernst & Young has published an informative paper analyzing the lease exposure drafts entitled “A closer look at the new lease accounting proposal” with valuable insights and commentary.

According to the E&Y report, the highlights you need to know are:

• The FASB and the IASB have proposed requiring lessees to recognize assets and liabilities arising from their involvement in most leases.

• Entities would still classify leases, but they would use different criteria for a different purpose. Lease classification would determine how entities recognize lease-related revenue and expense, as well as what lessors record on the balance sheet.

• Classification would be based on the portion of the economic benefits of the underlying asset that are expected to be consumed by the lessee over the lease term.

• FASB is expected to devote significant effort to outreach on this project. Comments on the exposure draft are due by September 13, 2013.

To download the May 23 report (free registration required) click here.

For more information about the webinar click here.