In August 2010, the IASB and FASB (the 'Boards') took a major step towards overhauling the existing lease accounting rules by issuing a set of proposals in the form of an exposure draft (ED). The proposals would significantly affect the accounting for lease contractors for both lessees and lessors across all industries.

Since issuing the ED, the Boards have conducted extensive outreach. The comment period, which ended on 15 December 2010, garnered over 750 letters, and afterwards the Board hosted roundtable sessions that included participants from all constituencies, including preparers, users and auditors from a wide cross section of industries.

Three of the more contentious issues highlighted by the consumer business industry during the Boards' outreach were around lease term, variable lease payments and pattern of expense recognition.  The Boards recently discussed those three issues and made a number of tentative decisions which differ from the proposals in the ED.

The Boards will reach out to constituents over the next several weeks to gather feedback on these tentative decisions.

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