Abstract:
The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have undertaken a joint project that may significantly impact the way leases are accounted for, if passed. The current treatment for lease accounting is very familiar to users and preparers, so if the proposed treatment is passed there will be some time needed for adjusting to the different accounting methods. These changes also have the potential to affect system and control aspects of companies that lease assets as well. Undergraduate students that are currently enrolled in accounting classes could possibly learn information that will be outdated upon their graduation and entrance into the workforce. I have outlined the current treatment for lease accounting, aspects of the proposed changes to lease accounting, a summary of concerns constituents have on the proposal, and comments from the Big Four accounting firms.
