In a letter to Financial Accounting Standards Board Chairman
Leslie Seidman and the International Accounting Standards Board
Chairman Hans Hoogervorst, AFP joined with 30 organizations to
express dissatisfaction over a proposed draft on leasing standards.
The joint letter addresses an array of inconsistencies in cost
valuation and asset/liability reporting that adversely raise costs
for U.S. businesses and fail to reflect economic activity.
"We believe the proposed leasing standard will increase
complexity, drive economic activity rather than reflect it and will
create adverse unintended consequences and pressures upon financial
reporting systems," the letter states. "In its current state, it is
our opinion that the proposed leasing standard may result in
substantial costs to businesses, lack any benefits for investors
and drive economic activity rather than reflect it."
Concerns about the proposed draft, the letter states, could be
addressed by ensuring that new lease standards:
- Reflect economic activity, rather than drive it
- Permit lease transaction outcomes to be truly reflected in
- Not increase cost of capital
- Keep costs of implementation from outweighing benefits of rule
- Consider non-accounting issues, including contractual
obligations, industry related practices and potential regulatory
- Be consistent for the lessor and lessee, and
- Remain transparent in identifying investor interests.
The letter was submitted on July 26, 2013 and is available