In part four of a series of interviews with FASB chairman Leslie Seidman, The Journal of Accountancy outlines why the board’s revised approach to lease accounting will not be a return to business as usual.
In response to a question regarding differentiating between finance and operating leases, Seidman notes that the revised approach was mostly about the lessee’s perspective, because the lessor does, in fact, sometimes take commitments off the balance sheet depending on the terms. However, lesees would still reflect lease commitments on the balance sheet. “The board will, however, consider whether there should be an exception for short-term leases”, Seidman said.
Seidman explained what the board discussed was distinguishing between the two, primarily for the purpose of income statement recognition. Seidman said, “on the lessor side, the board is exploring whether there are some lease arrangements that are not entered into primarily for financing purposes, and therefore, whether a different pattern of income statement recognition would be appropriate.”
To read the full text of the Q&A interview with Leslie Seidman:
click here.
Like this story? Begin each business day with news you need to know! Click here to register now for our FREE Daily E-News Broadcast and start YOUR day informed!
No tags available