Future of Lease Accounting

Financial AnalysisMarch 17, 2012 · 1 min read

2005: SEC report on off-balance sheet financing stated that lease standards should be revised.
2006: FASB and IASB agreed to incorporate lease accounting into their project plans.
General Sentiment: Current lease accounting model is broken and current rules for distinguishing between operating and capital leases provides firms with the opportunity to structure their balance sheets.
Future: Operating leases are expected to be eliminated and firms will gross up their balance sheets with assets and liabilities.