Implementing the New Lease Accounting Standards

Norman Strauss, Marc Siegel, Mark LaMonte, Amie Thuener, Scott Taub, and Prabhakar Kalavacherla

The panel began with Siegel outlining FASB's development of the long-gestating lease accounting standard. “The idea was to try to take operating leases, which traditionally … have been added back to the balance sheet using the disclosures, and try to make that a little bit easier by actually presenting them on the balance sheet through recognition and measurement.” The standard was also part of the convergence effort with the IASB, though the final classification of leases as operating or finaning does deviate from the IFRS's approach of classifying all leases as finance leases. “We went with a different approach based on feedback that we got from many constituents, including most of the preparers,” he admitted. “We're hopeful that the actual outcomes in profit and loss statements wouldn't be all that different in terms of trends,” he said.