Industry Wire

TRALA Tackles Proposed Lease Accounting Changes

TRALA’s FASB Working Group met via conference call on Tuesday, March 31 to review newly proposed changes in lease accounting rules. The long-awaited proposal for overhauling lease accounting was issued jointly on March 19 by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). TRALA’s FASB Working Group will be submitting comments on the proposal to FASB and meeting with officials to discuss concerns with the proposed standards. Click here to see a copy of the FASB/IASB Discussion Paper titled, Leases: Preliminary Views.

The FASB/IASB Lease Accounting Project aims to develop new standards requiring the capitalization of all material leases and eliminating the concept of operating leases. While TRALA supports a workable solution to insure the accurate reporting of lease transactions in financial statements, the industry wants to insure that the new standards reflect the economic reality of truck leasing…especially full-service leasing. For example, capitalizing service costs, regulatory and tax compliance costs and contingent rents may significantly…and inappropriately impact a lessee’s balance sheet regarding assets and liabilities. TRALA is also concerned with the FASB/IASB approach of treating all leases the same with no separate classifications for different types of lease transactions and terms.

During the March 31 conference call, Bill Bosco, a prominent leasing industry specialist, provided a presentation to the TRALA FASB Working Group on the new proposal. Bosco was appointed by the FASB to serve on its International Working Group, which was created to serve as an advisory group to the standard-setting agency. Click here to see a copy of Bill Bosco’s presentation to TRALA on the FASB/IASB proposal. For more information, contact TRALA’s Tom James at 703-299-9120 or at tjames@trala.org.