Not everyone is hailing the Financial Accounting Standards Board’s new lease accounting standard, including one FASB member who voted against the standard, and a key investor group that has also expressed qualms.
FASB released the long-awaited leasing standard last week after a decade of work with the International Accounting Standards Board as one of their major convergence projects (see FASB Releases Lease Accounting Standard). Near the end of Section B of the new leasing standard, on page 331, is the summary of a dissent from longtime FASB member Marc Siegel. While the other six board members voted to affirm the standard, FASB acknowledged, “Mr. Siegel dissents from the issuance of the guidance in this Update because, on balance, he believes that the new information will not represent sufficient predictive value, confirmatory value, or both to be decision useful to financial statement users. While Mr. Siegel firmly agrees with the recognition of lease assets and liabilities for all leases, he believes that the measurement of the lessee’s liability required by the guidance will provide insufficient decision-useful information for investors, such that significant adjustments will continue to be made by financial statement users.”
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