The International Accounting Standards Board (IASB) has issued this Exposure Draft to improve the reporting of lease contracts. The accounting under existing requirements depends on the classification of a lease. Classification as an operating lease results in the lessee not recording any assets or liabilities in the statement of financial position under either International Financial Reporting Standards or US standards (generally accepted accounting principles). This results in many investors having to adjust the financial statements (using disclosures and other available information) to estimate the effects of lessees’ operating leases for the purpose of investment analysis. The proposals would result in a consistent approach to lease accounting for both lessees and lessors—a ‘right-of-use’ approach. This approach would result in all leases being included in the statement of financial position, thus providing more complete and useful information to investors and other users of financial statements.
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Invitation to comments
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ASB invites comments on the Exposure Draft from the public. The downloadable version of the draft is available at http://www.ifrs.org/NR/rdonlyres/C03C9E95-822E-4716-81ED-04B9CC4943BE/0/EDLeasesStandard0810.pdf, whereas, basis for conclusions are available at http://www.ifrs.org/NR/rdonlyres/165478E5-02A8-4E19-A502-7B1CA48D495B/0/EDLeasesBasis0810.pdf. Comments would be most helpful if they indicate the specific paragraph or group of paragraphs to which they relate, contain a clear rationale and, where applicable, provide a suggestion for alternative wording.
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Comments should be submitted in writing to the Secretary, Accounting Standards Board, The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi-110002, so as to be received not later than October 31, 2010. Comments can also be sent by e-mail at asb@icai.org or edcommentsasb@icai.org.
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