As expected, the Financial Accounting Standards Board formally added a project to its agenda to reconsider the current accounting standards for leases.

FASB said that the goal of that project is to insure that investors and other users of financial statements are provided useful, transparent and complete information about leasing transactions in the financial statements.

The board said that the decision to add a leasing project reflects its concern that the current accounting in the area does not clearly portray the resources and obligations arising from lease transactions. The project will be conducted in partnership with the International Accounting Standards Board.

Before making the decision, board FASB said that it consulted with its constituents, including its own Financial Accounting Standards Advisory Council and User Advisory Council as well as Securities and Exchange Commission staff.

The SEC staff formally raised a number of issues with the current lease accounting as well as recommending improvements to the area in a June 2005 report to Congress on off-balance sheet arrangements required by the Sarbanes-Oxley Act.

The FASB and IASB said that the project's first milestone will be a preliminary views document, which they plan to issue for public comment in 2008.

Previously on WebCPA:

FASB Expected to Vote on Lease Project (July 19, 2006)

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