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15 July 2014

EFRAG: Consultation on lessee accounting


EFRAG is consulting on two alternative approaches for lessees. EFRAG is also interested in examples of contracts or transactions that would qualify as leases under the proposals but in users’ views are in substance services.

Leases are an important class of transactions widely used in many industries. Under the current Standard IAS 17, for some leases a lessee recognises assets and liabilities on its balance sheet, while for other leases a lessee only recognises an operating expense in its income statement. The IASB and the FASB (the Boards) are working on a new Standard that requires recognition of all leases on the balance sheet and published a joint ED in 2013. The Boards have now started their re-deliberation process; in March 2014, the two Boards confirmed that all leases should be recognised, but tentatively decided to support two different approaches for subsequent measurement of leases.

The objective of this additional public consultation is twofold. Firstly, we seek users’ views and their preference of the two alternative approaches for lessees re-deliberated by the Boards. Secondly, it is meant to help to identify transactions that would qualify as leases under the proposals but, in opinion of users of financial statements, should be excluded from the scope of the expected requirements for leases and treated as in-substance service transactions.

Deadline: 29 August 2014.

Press release



© EFRAG - European Financial Reporting Advisory Group


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