Stay Informed
iLeasePro Newsletter

Expert Knowledge to Your Inbox - SignUp Now!

July 23, 2014: Highlights from the Joint Board Meeting


On July 23, 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), collectively referred to as the Boards, convened to advance discussions regarding their Joint Proposal on Lease Accounting. These discussions, primarily focused on lessee accounting issues, delved into the intricacies of accounting for sale and leaseback transactions, shedding light on the evolving landscape of lease accounting standards.

One notable outcome of this meeting was the consensus that a seller/lessee, in the context of a sale and leaseback transaction, should refer to the new revenue recognition guidance to determine whether a sale has indeed been consummated. This alignment with revenue recognition guidelines aims to ensure consistency and clarity in accounting practices, especially in cases where leases are intertwined with sales.

However, it's crucial to recognize that the FASB and the IASB are pursuing distinct approaches to lessee accounting. The FASB has adopted a dual classification system, categorizing leases into Type A and Type B, whereas the IASB has introduced a unified lease model. These contrasting approaches have implications for decisions on issues like sale and leaseback transactions. For instance, the FASB has articulated that if the seller/lessee concludes that a lease transaction falls under the Type A category, then, by definition, no sale has occurred. On the other hand, the IASB did not explicitly comment on this matter but indicated that if the seller/lessee retains a substantial repurchase option concerning the underlying asset, then the transaction should not be considered a sale.

This meeting marked an important step in the ongoing deliberations of the Joint Project. As the FASB and IASB continue to navigate the complexities of lease accounting, their decisions will have far-reaching implications for businesses and financial reporting worldwide. These discussions serve as a reminder of the dynamic nature of accounting standards, which constantly evolve to reflect the changing landscape of business transactions and practices. The Boards will carry forward their deliberations in future meetings, shaping the future of lease accounting standards in the global financial arena. Stay tuned for further developments in this crucial area of accounting.




Related: iLeasePro Free Trial, iLeaseXpress, iLeaseXpress Unlimited, ASC 842 Financial Reporting, ASC 842 Balance Sheet Reporting, ASC 842 Income Statement Reporting, ASC 842 Cash Flow Reporting, ASC 842 Statement of Shareholder Equity, ASC 842 Disclosure Notes, ASC 842 Management Discussion, ASC 842 Comprehensive Income, ASC 842 Glossary of Terms, ASC 842 Journal Entries, ASC 842 Software, When Is the ASC 842 Compliance Date, FASB Lease Accounting Software, Understanding the New FASB ASC 842 Lease Accounting Standard, How Does a Lease Balance Sheet Change After the New Standard?, Tracking Lease Details After ASC 842, Deferred Rent Explained Under the ASC 842, Guide to Lease Classification, Overview of Relevant Borrowing Rate, ASC 842 Footnote Disclosure, Lease Accounting, What Does Lease Accounting Software Do?, Key Features of A Lease Accounting Software, How to Never Miss Important Lease Dates, Scaling Your Lease Accounting Software to Your Business Needs, How to Select the Right Lease Solution, How to Set Up Lease Accounting Software, What is the Best Lease Accounting Software?, Overview of the Types of Leases, Equipment Lease Software, How the Right Lease Management Software Makes Equipment Leases Easier, Lease Tracking Software, How The Right Software Can Help You Manage Lease Data, Five Benefits of a SaaS Lease Management Solution, A Centralized Lease Portfolio Making Asset Management Easier, Lease Analysis 101, Lease Analysis: The Financial Metrics, Lease Abstraction, The Importance of Lease Abstraction for Lessees, The Lease Data an Abstract Should Include, What Software Do I Need for Lease Abstracting?, Navigating The ASC 842 Accounting Audit, Ultimate Lease Accounting Audit Checklist, Essential Guide To Engaging Auditors, Leveraging AI for Enhanced Year-End Audits Transitioning to the ASC 842 Standard Lease Document Management ASC 842 Short-Term Leases Practical Expedients Lease Modifications & Remeasurements Lease Variable Payments Embedded Leases Monitoring Critical Lease Dates Transportation - Navigate the ASC 842 The Impact of the ASC 842 on Regulatory Policies in Lease Management & Lease Accounting Integrating Lease Accounting into Your Month-End Closing Process The Modified Retrospective Approach in ASC 842 Determining the Incremental Borrowing Rate