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Non-Monetary Defaults and Lease Accounting

The FASB has recently decided to rethink it’s original plans for implementation of new standards for lease accounting.

By Jonathan Hipp | Updated on October 20, 2011

The FASB has recently decided to rethink it’s original plans for implementation of new standards for lease accounting. Make no mistake, it’s coming, but it’s just being deferred a little longer. They are planning on issuing a new exposure draft in the first quarter of 2012.

The main reason for the delay in issuance of a standard has been the push back that the FASB received on the initial exposure draft. The outcry from people on both philosophical and practical grounds was immense. While many, including us, intellectually accept the notion of capitalizing leases used for financing purposes the regime being proposed by the FASB was so far reaching that it just didn’t make sense in many cases. Some of the pushback was also directed at the some of the unintended consequences of moving itemsfrom the footnotes to balance sheet.

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