Key Takeaways from the FASB and IASB Joint Meeting
The FASB and the IASB (“the Boards) held a joint meeting on October 22, 2014 to continue deliberating the proposals in the May 2013 Exposure Draft, Leases. The discussion centered exclusively on the definition of a lease and, for the most part, reiterated the tentative conclusions that had been previously discussed. The Boards indicated that a lease should be defined as the right to use an asset (underlying asset) for a period of time in exchange for consideration. The underlying asset should be explicitly or implicitly identified and, if the supplier has a substantive right to substitute the asset, then the agreement would not meet the definition of a lease. Indications of substantive rights to substitute have been provided in the detailed discussions by the Boards.
In addition, in order to have a lease, a customer must be able to control the use of the underlying asset by either (1) having the right to operate the asset or direct others to operate the asset or (2) designing or causing to design the asset in a manner that predetermines how the asset will be used or how the asset will be operated.
The ease and speed with which iLeasePro enables users to input this vital data is a game-changer in the world of lease management. Equally important is the fact that this critical information is readily accessible to all relevant stakeholders within the organization who have appropriate access permissions.
The Boards will continue to deliberate the provisions of the May 2013 Exposure Draft in future meetings.
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