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News Release

London

JLL reacts to IASB lease accounting standards update


JLL has published a paper on the recent International Accounting Standards Board (IASB) update which highlights the divergence between the IASB and the US Financial Accounting Standards Board (FASB) on lease accounting standards.
 
Michael Evans, director in JLL’s Corporate Solutions team, said: “Although both boards are in agreement that all leases should come on to the balance sheet, there is a major difference between IASB and FASB on the treatment of leases in the income statement. The IASB has opted to go back to a single classification of all leases that would require the recognition of interest and amortisation in the income statement for all leases.  The FASB has decided it will retain a dual lease accounting model that retains the distinction between finance leases and operating leases.”
 
Michael Evans added: “The IASB expect to issue a new standard in 2015. After 8 years the time for discussion on lease accounting proposals is coming to an end and the time for action is here. Corporates need to get ready by finding out the impact on the income statement and balance sheet and how to capture the data required for reporting as well as thinking about the implications on the current property decisions they are making.”