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Lease Accounting Proposal Gets Praise and Questions

Tammy Whitehouse | June 26, 2012

After more than a year of deliberating changes to a proposed standard for lease accounting, standard setters have settled on a two-model approach that will require some leases to be treated like the financed purchase of an asset, while others will be allowed to behave like rental agreements.

That's the latest thinking from the Financial Accounting Standards Board and the International Accounting Standards Board, and it's a watershed decision to settle one of the biggest issues the boards have tried to address as they work to converge U.S. and international accounting standards. Yet the boards are far from finished in determining how they will get the accounting treatment they have now deemed permissible.

“I'm very pleased they decided there are two different models for leases,” says John Hepp, a partner with Grant Thornton. “The dividing line between what's going... To get the full story, subscribe now.