Are You Ready for the Proposed Changes to Accounting for Leases?
Description On August 17, 2010, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) proposed a new approach to lease accounting that would significantly change the way entities account for leases. Their exposure drafts, Leases, would result in a converged standard that aims to address the perceived weaknesses of existing standards. The key objective is to ensure assets and liabilities arising from lease contracts are recognized in the balance sheet. The exposure draft does not propose a specific effective date, but it is anticipated that the final standard will not be effective before 2013 and would require comparative periods. Given the potential impact of the proposed changes on accounting, operations and IT systems, companies should begin assessing the implications of the proposal on existing contracts, technology and processes. This Issue Alert summarizes the key provisions of the Leases exposure draft and includes a self-assessment questionnaire developed by PricewaterhouseCoopers LLP to help companies understand the potential impact of the Leases exposure draft.
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