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Lease Accounting Vote Possibly Slated for June

May 25, 2012, 08:00 AM
Filed Under: Regulatory News

The Wall Street Journal reported U.S. and international accounting rule makers are readying to vote on a method for how new lease accounting rules will impact corporate earnings in June, resulting in a new draft of the rules being potentially completed by the end of 2012.
The Wall Street Journal report states members of both boards said they were open to voting on two methods for representation of lease costs. The first option recognizes leases, or the right to use a piece of property or equipment as a new “right of use asset” on corporate balance sheets and requires a depreciation method that front-loads the cost of the lease into its early years. The second option would bring leases on the balance sheet, but let companies expense their rent payments equally over the course of a lease.  The reports also states board members said they wanted to vote in June on whether to allow companies to use only one method or the other, or some combination.

Acording to the report, two other methods of asset amortization considered by the board and discussed with companies and investors over the past few months were rejected due to their complexity.

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