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01 July 2014

EFRAG and the National Standard Setters invitation to public consultation on lessee accounting


EFRAG and the National Standard Setters are consulting constituents on the two approaches for lessees. They are also interested in examples of contracts or transactions that would qualify as leases under the proposals.

On 16 May 2013, the IASB issued the revised Exposure Draft Leases (the ED). After the comment period ended in September 2013, the IASB and the FASB (the Boards) started the re-deliberation process. In March 2014, the two Boards tentatively decided to support two different approaches for lessees. The IASB proposed a single model based on Type-A lease accounting. The FASB proposed a model that, based on IAS 17 criteria, distinguishes leases that are in effect purchases and other leases; these are accounted for using a straight line cost recognition pattern.

What is the objective of this additional public consultation?

The objective of this additional public consultation is twofold. Firstly, it is meant to help to identify transactions that would qualify as leases under the proposals but constituents view as in-substance service transactions that should not be recognised by a lessee. Secondly, we seek constituents’ views and their preference of the two alternative approaches proposed by the Boards.

When and how will this field-test be conducted?

This additional public consultation will start on 30 June 2014.

The participants are requested to answer the developed consultation questions on the scope of the proposals and alternative approaches.

Additionally, follow-up interviews may be conducted by EFRAG and the National Standard Setters. The information provided to EFRAG and the National Standard Setters will remain confidential. Information used in any reports will be presented in such a way that no individual company or person can be identified. However, the list of participants in this additional public consultation will be made public, unless participants explicitly request anonymity. The output of this additional public consultation will be shared between EFRAG, the National Standard Setters. 

Deadline for comments Friday, 22 August 2014.

Press release



© EFRAG - European Financial Reporting Advisory Group


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