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Results of outreach meetings with investors and analysts on the proposed accounting by lessees

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Sep 27, 2013

The IASB staff has published a summary of feedback that the FASB and IASB received at recent meetings with investors and analysts on the lessee accounting proposals. These outreach meetings were held between May and September 2013.

During the outreach meetings, the FASB and the IASB asked investors and analysts three main questions about the proposals in Proposed ASU 2013-270 and ED/2013/6 which were published in May 2013:

  • Do leases create assets and liabilities for a lessee and, if so, should they be recognized on a lessee’s balance sheet?
  • What are your views on the proposed changes to a lessee’s income statement?
  • What are your views on the proposed note disclosure package?

On the balance sheet question, the credit analysts and analysts consulted within the credit rating agencies generally supported the changes proposed to a lessee’s balance sheet while the views of equity analysts were more mixed.

Regarding the income statement proposals, most, but not all, investors and analysts consulted agreed that there are economic differences between most leases of real estate and leases of equipment and vehicles and understand the rationale behind the dual approach proposed. Most of those who supported the balance sheet proposals, and yet disagreed with the dual approach in the income statement, still support the project overall. They are willing to accept the proposals in the income statement to achieve what they consider to be an improvement to financial reporting.

Not all investors and analysts consulted expressed views on the disclosure proposals. Of those who did, there was general support for those proposals. However, some investors and analysts suggested not changing the recognition and measurement of leases at all, but only improving note disclosures.

Please click for access to the full summary on the IASB's website. Further investor and analyst outreach meetings are scheduled for September and October 2013.

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