FASB, IASB RELEASE NEW LEASING STANDARD PROPOSALS
Norwalk, Conn. - The Financial Accounting Standards Board and the International Accounting Standards Board have published their long-awaited joint proposals for overhauling the accounting standards for lease contracts.
The proposals are likely to have a major impact on the way that airlines, commercial and residential property landlords, and equipment rental companies do business. The proposal would require that all lease obligations be recorded on the balance sheet at the present value of the expected lease payment, along with an asset representing the right to use the leased asset, in what is sometimes referred to as the "right-to-use model." The proposal does include an exception for short-term leases, however.
There are some minor differences between the proposals released by the two boards. Some are due to cross-references to variations in other standards, such as the impairment standards used by the two boards.
PCAOB WANTS PUBLIC DISCIPLINARY HEARINGS
Washington, D.C. - The acting chairman of the Public Company Accounting Oversight Board, Daniel L. Goelzer, plans to ask Congress to consider a change to the Sarbanes-Oxley Act to allow the PCAOB's disciplinary hearings of accountants and accounting firms, along with the related proceedings, to be made public.
Goelzer has directed the PCAOB staff to develop a proposal that will be sent to Congress requesting the change. Currently, under Sarbanes-Oxley, disciplinary hearings and proceedings are kept private, unless the PCAOB finds good cause to make them public, and all the parties concerned agree to open them to the public. That rarely, if ever, happens.
Public disciplinary hearings would conform to a long-standing practice at the Securities and Exchange Commission to provide public disciplinary hearings on matters regarding auditors. However, under current law, firms and auditors litigating with the PCAOB have little incentive to consent to public proceedings and can prevent the proceedings from becoming public for long after the information would be most relevant to investors, other auditors, and interested parties.
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