Introduction

As a follow-up to our earlier Lease Tip, The Impact on Corporate Real Estate of Lease Accounting Changes under GAAP, we have compiled a list of the most instructive resources covering the effects of the proposed accounting changes by FASB/IASB.  

KBA is preparing comments for submission to the FASB/IASB boards.  Our focus is on the treatment of operating expenses and the inclusion of option periods in determining the length of leases.   Lend your support to KBA’s comments.  

Additional Resources

1. FASB Exposure Draft  and IASB Exposure Draft:   Exposure Draft of FASB’s proposed Accounting Standards Update of Topic 840 – “Leases”  and the Exposure Draft of the IASB, also entitled “Leases.”  Additional documents and resources from FASB/IASB:
             – Submit or read public comments to FASB          
             – FASB Summary of proposals contained in the Exposure Draft
             – Submit or read public comments to IASB
             – FASB/IASB Discussion Paper
2. FASB/IASB Webcast (Broadcast 10/28/10):  Larry Smith (FASB Board Member), Kevin Stoklosa (FASB Assistant Director), and Danielle Zeyher (FASB Project Manager) discuss the Exposure Draft and some initial stakeholder reactions gathered as part of the Boards’ outreach activities.  KBA has posted the slide presentation on its website here.
3. IASB Exposure Draft Snapshot Slideshow (08/2010): Provides an introduction and overview of the proposed IFRS on leases being undertaken jointly by the IASB and FASB.
4. Summary of project activities and decisions of the FASB and the IASB. FASB’s joint project on leases webpage, providing updates, timelines, due process documents, contact personnel and other links. 
5. Podcasts offered by FASB.  FASB member Leslie Seidman and FASB Project Manager Danielle Zeyher discuss the Exposure Draft on Leases. 
6. CoreNet Global presentation entitled “Space Matters: the Future of FAS 13- How the Proposed Changes will Affect Your Leased Portfolio Strategy” (09/19-21/2010): Slides from presentation by Richard Podos of Lance LLC and Russell Howell from Johnson Controls, Inc. at CoreNet Global’s Phoenix Global Summit. Summarizes strategic and operational implications and opportunities of the Exposure Draft on Leases.
7. Presentation by Ernst & Young, FASB / IASB Joint project on leases presentation to CoreNet New York City Chapter (10/20/2010):  Slides from presentation by Serena Wolfe, Senior Manager, NYC and Josh Herrenkohl, Senior Manager, NYC.  Excellent summary of key points for corporate real estate professionals. 
8. Suggested Comments to Proposed Lease Accounting Changes (09/21/2010): Suggested answers to questions posed regarding the proposed accounting changes. Taken from the Strategy Portfolio and Planning Community during CoreNet’s Phoenix Global Summit.
9. Article by Bill Early, SIOR, Copaken Brooks, “Upcoming FASB/IASB Changes to Lease Accounting Standards”: Thorough explanation of upcoming changes.
10. KBA Lease Services’ Lease Tip (9/15/2010): “The Impact on Corporate Real Estate of Lease Accounting Changes under GAAP”:  Concise explanation of proposed changes.   Part of KBA’s Lease Tip series.

If you know of additional resources on this topic and would like KBA to list them in this Index, please contact Lou Ferro, CPA, Sr. VP Audit Services, KBA Lease Services, lferro@kbalease.com or 888.750.4500 ext. 405.

Background of FASB and Lease Accounting Rules

The Financial Accounting Standards Board (FASB) is a private organization recognized by the United States government and the accounting world as the authority on accounting rules.  Since every company with publicly-traded stocks or bonds must comply with Generally Accepted Accounting Principles (“GAAP”), by default they must comport their accounting standards to FASB’s regulations.  The proposed changes to accounting for leases are a joint effort between the FASB and the International Accounting Standards Board (IASB).  FASB’s regulation of lease accounting was contained in FAS 13, issued in 1976.  Although FAS 13 has been “superseded” by the new FASB codification compiling all lease accounting rules and relevant guidelines in section ASC 840 (select the FREE basic view at the bottom of the page), the substance has remained materially the same.  The IASB’s corresponding lease accounting provision is found in IFRS 17.  There are some marked differences between the current ASC 840 (FAS 13) and IFRS 17’s treatment of leases; a clear comparison is available here.