IFRS industry insights - The leasing project
An update for the shipping industry
In August 2010, the IASB and FASB (the 'Boards') took a major step towards overhauling the existing lease accounting rules by issuing a set of proposals in the form of an exposure draft (ED). The proposals would significantly affect the accounting for lease contractors for both lessees and lessors across all industries.
Since issuing the ED, the Boards have conducted extensive outreach. The comment period, which ended on 15 December 2010, garnered over 750 responses, and resulted in roundtable sessions that included participants from all constituencies, including preparers, users and auditors from a wide cross section of industries.
Respondents from the shipping industry expressed concern over a number of proposals in the ED, including the definition of a lease, lease term, variable lease payments and lessor accounting. The Boards recently discussed the first three of those topics (the Boards expect to tackle lessor accounting in April) and made some tentative decisions which differ from the proposals in the ED.