Need to know — IASB re-exposes proposals on lease accounting

Published on: 17 May 2013

This publication from Deloitte (UK) discusses IASB Exposure Draft ED/2013/6 Leases.


The proposals would significantly affect the accounting for lease contracts by both lessees and lessors. Changes in recognition, measurement, and presentation of leases under the revised proposals may significantly impact financial statement metrics.

For lessees, operating lease/off-balance sheet treatment would be eliminated for virtually all leases except short-term leases. The lease expense recognised each period could be significantly impacted depending on the nature of the underlying leased asset as property or non-property. A detailed analysis of lease payments will be required for both classification and measurement.

For lessors, the nature of the underlying leased asset will dictate whether the asset is derecognised and the pattern of income recognition. Some leases previously treated as ‘operating leases’ may require the underlying asset to be derecognised and be replaced with a lease receivable and a residual asset.

The proposals would require management to exercise significant judgement in areas including identifying a lease, determining the lease term, and measuring lease assets and liabilities.


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