The Financial Accounting Standards Board (FASB) issued for public comment a proposal outlining an alternative within U.S. GAAP for applying consolidation guidance to leasing companies under common control. Stakeholders are asked to provide comments on the exposure draft by October 14, 2013.

“This proposal is intended to help lenders and other users better align the information used in assessing the financial position of private companies that prepare financial statements,” said FASB chairman Russell G. Golden. “We look forward to receiving feedback on the effectiveness of the proposal from private company stakeholders.”

The proposed GAAP alternative, Applying Variable Interest Entity Guidance to Common Control Leasing Arrangements (formerly FIN 46(R) and FAS 167), would exempt many private companies from applying variable interest entity guidance to lessor companies under common control. A variable interest entity is a company in which controlling financial interest is not established based on a majority of voting rights.

The effective dates will be determined after the FASB and the PCC consider stakeholder feedback on the Exposure Draft. Following receipt of public comments, the PCC and the FASB expect to the discuss feedback at the November 12, 2013 PCC meeting. The PCC will then consider changes to the original proposal and take a final vote before submitting to the FASB for a final decision on endorsement.