The Financial Accounting Standards Board voted to proceed with a new accounting standard that would require companies and other organizations to include lease obligations on their balance sheets. The final accounting standards update is expected to be published in early 2016.

The FASB decided that for public companies, the upcoming standard will be effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2018. The standard will not take effect for private companies until 2019.

As a next step, the FASB staff will complete a ballot draft of the update, which includes all of the board’s final decisions. The ballot draft will be shared with each of the seven board members, who will review it to ensure that it accurately reflects decisions made throughout their public deliberations. When the board is satisfied that the ballot draft reflects its intentions, the draft will be submitted to production for final publication.

“We believe that this new standard is important because it will provide investors, lenders and other users of financial statements a more accurate picture of the long-term financial obligations of the companies to which they provide capital,” said FASB Chairman Russell G. Golden.

The leases project was added to the FASB’s joint agenda with the International Accounting Standards Board in response to concerns from investors, other financial statement users and the U.S. Securities and Exchange Commission regarding the lack of transparency related to material lease obligations that have been reported off-balance sheet.