POV Case

Question 1

Current Lease Practice

Answer 1

SFAS 13/ASC 840, operating vs. capital, use strict rules and bright line accounting, asset (capital) and is depreciated, liability but most leases in practice are operating

Question 2

IAS Model

Answer 2

IFRS 17, operating vs. financing, use judgement and principles, “substance over form”, similar to current practice in assets, liabilities, and most leases being operating

Question 3

New ED

Answer 3

Joint project of FASB and IASB, “virtually” all leases will be capitalized, no judgement and no decision (compared to intangibles), new category of assets “right of use” asset (LT) that will be amortized, $1+ trillion in new liabilities

Question 4

SFAS referencing system

Answer 4

standard - paragraph

Question 5

ASC referencing system

Answer 5

topic - subtopic - section - paragraph

Question 6

IFRS referencing system

Answer 6

standard - paragraph