The following is an excerpt from an article, authored by leasing industry expert and consultant Bill Bosco, that provides insight into how “overwhelming negative feedback” may cause the accounting boards (FASB and IASB) to change direction on the proposed new leasing accounting standards:

As that noted leasing expert Yogi Berra said, “It’s not over ’till it’s over!” The accounting Boards (FASB and IASB) received 781 comment letters to their Exposure Draft (ED) on leasing and held numerous outreach meetings of a cross section of users, lessees and lessors through January.

Bosco notes that the overwhelming negative feedback in the comment letters and at the meetings has made an impression on the Boards as they are changing their direction to accommodate much of the criticism. This shows that your influence counts and they do listen to feedback. The only thing the comment letters do agree on is that it is a good idea for lessees to capitalize material operating lease contractual obligations but the majority of the feedback cited several issues that the Boards will address in their re-deliberation work plan.

The Boards held their first meetings in early 2011 and made some tentative decisions but instructed the staff to field test the decisions and get feedback though outreach to stakeholders. This outreach and field testing process will be very important especially if they chose not to re-expose the rule before issuance. The U.S. leasing industry stakeholders should take an active role in the outreach to insure their positions are addressed by the Boards. The Boards want to make final decisions in April so they can still make their 2011 target for issuance.

Editor’s note: A much expanded version of this article will appear in the March/April issue of the Monitor.