“More than insignificant” is key judgment in leases proposal

Jul 26, 2012
CPAs might have difficulty at times determining what constitutes “more than insignificant” consumption of a leased asset by a lessee under a proposed standard being jointly developed by FASB and IASB, according to a webcast conducted Thursday by the boards.

On rare occasions, a lessee and lessor might even reach different conclusions about which recognition model to use for the same asset as leases are placed on the balance sheet, according to the boards’ staffs.

But the boards intend to provide significant guidance to minimize these application concerns when they issue a second exposure draft on leases in the fourth quarter of 2012.

Read more from the Journal of Accountancy.