In March, the working group assembled by the Financial Accounting Standards Board and the International Accounting Standards Board will meet in London for the first time to make a comprehensive review of lease accounting rules.Because transparency has been seriously compromised under the current rules, Grant Thornton believes that this review is critical and comes not a moment too soon.

The problem is that existing lease accounting rules permit assets (and the related financing liabilities) to be kept off the books, regardless of economic substance, as long as the form of the transaction stays within the bright lines of the rules. Those rules have expanded over the years to include 16 FASB statements and interpretations, 11 technical bulletins and staff positions, and at least 30 Emerging Issues Task Force abstracts. Only specialists can hope to navigate such complexity.

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