The Financial Accounting Standards Board voted Wednesday to proceed to issuing a final standard on its long-delayed project for overhauling the accounting for leases and set the dates for when the new standard will take effect.

The final accounting standards update will be published in early 2016. FASB has decided that for public companies, the upcoming standard will be effective for fiscal years (and interim periods within those fiscal years) beginning after Dec. 15, 2018,. For private companies, the standard will be effective for annual periods beginning after December 15, 2019. Early adoption will be permitted for all companies and organizations upon issuance of the standard.

FASB has been working on converging its leasing standard with the International Accounting Standards Board for over a decade, but said it would be issued in the coming weeks. The two boards remain at odds on some key aspects of the final standards, but agree that lease obligations should be added to the balance sheet, a move that will be a substantial change for many companies.

As a next step, the FASB staff will complete a “ballot draft” of the accounting standards update that includes all of the Board’s final decisions. The ballot draft will be shared with each of the seven board members, who will review it to ensure that it accurately reflects decisions made throughout their public deliberations.  When the board is satisfied that the ballot draft reflects its intentions, the draft will be submitted to production for final publication.

“We believe that this new standard is important because it will provide investors, lenders and other users of financial statements a more accurate picture of the long-term financial obligations of the companies to which they provide capital,” said FASB Chairman Russell G. Golden in a statement.

The leases project was added to the FASB’s joint agenda with the IASB in response to concerns from investors, other financial statement users, and the U.S. Securities and Exchange Commission regarding the lack of transparency relating to material lease obligations that have been reported off-balance sheet.  The SEC staff in 2005 identified leasing as a form of off-balance sheet accounting that should be addressed by FASB.

The decision to issue the final standard followed extensive stakeholder outreach. FASB received more than 1,740 comment letters after issuing a discussion paper in 2009 and two exposure drafts in 2010 and 2013. Over the years, FASB participated in more than 200 meetings with financial statement preparers and users, hosted 15 public roundtables, 15 preparer workshops, and 14 meetings with practitioners, standard setters, and other interested parties. In addition, the FASB and the IASB met with more than 500 users of financial statements.

It is expected that the final standard will be published in early 2016, giving preparers enough time to review and prepare for the changes by the effective dates.

More information about the upcoming standard is available at www.fasb.org.