The Financial Accounting Standards Board is pressing on with its planned fourth-quarter release of the final new accounting standard on leasing, despite a fresh push from a member of the House Financial Services Committee to reassess the potential economic consequences.

In an exchange of correspondence over dueling academic studies, Rep. Brad Sherman, a California Democrat and senior member of the Financial Services Committee, implored FASB Chairman Russ Golden to pay closer attention to analysis that says the proposed leasing standard will exact a heavy toll on the U.S. economy. Golden replied by defended FASB’s due process to date, saying many of the concerns raise in the work Sherman cites have been refuted or addressed in deliberations on how the final standard will read.

Sherman is relying on the work of Chang & Adams Consulting, which says job losses in the United States could range from 190,00 to more than 3 million, and the hit to the Gross Domestic Product could range from $27.5 billion to $478.6 billion annually. In addition to the cost of the compliance with the new standard itself, Sherman worries about entities’ access to debt when debt covenants are affected by the new balance sheet metrics that the standard will produce. 

Chang & Adams produced their study based on FASB’s and the International Accounting Standards Board’s exposure drafts of 2012, which have been reworked considerably based on feedback to those proposals. FASB’s overseer, the Financial Accounting Foundation, funded a separate academic analysis of the Chang & Adams study in April 2015, and it poked a number of holes in Chang & Adams’ findings. Chang & Adams have poked back by picking apart the FAF-funded analysis.

Sherman pressed Golden to pay closer attention to Chang & Adams’ criticism of the FAF-funded analysis, even in a public meeting, before issuing the new standard. “We understand from your website that you plan to issue the new standard before the end of the year, apparently without commencing this essential economic analysis, cost-benefit study, and field testing,” the Congressman wrote. “Apparently the entire U.S. economy is to be the test bed, and only after the standard is imposed.”

Sherman continues by reminding Golden of FASB’s duty under the Securities and Exchange Commission to carefully weigh expected benefits and perceived costs of new standards. “Should the board choose not to do what is necessary to fulfill this responsibility on such a consequential standard that will have such far-reaching consequences for the U.S. economy, I and other members of Congress who have already written to you will seek a legislative remedy,” he wrote.

Golden replied to Sherman with a five-page letter outlining the extensive due process and study the board has put into developing the lease accounting standard over many years. “As you know, the financial accounting standard-setting process sometimes results in controversial proposals,” Golden wrote. “This is why the FASB believes it is imperative that our process take into consideration the often conflicting views of all affected stakeholders as we seek to achieve the right balance of improving financial accounting and reporting standards and fostering financial reporting that provides transparent and useful information to investors and other users of financial statements.”

Golden says he has invited Andrew Chang of the Chang & Adams study to his office to discuss his concerns. He also lists the changes FASB has already made to the lease accounting standard based on concerns raised in Chang’s original assessment and by numerous stakeholders in comment letters on the proposal.