Leasing for lessees: a theoretical essay on the divergences between IASB and FASB after the due process
Abstract
Several criticisms of the accounting rules on leasing led the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) to come together in search of a joint solution through a due process, which culminated in the issuance of IFRS 16 by IASB and ASC 842 by the FASB. However, it was not possible to reach full consensus. Thus, this study aimed to analyze the main differences regarding the accounting for leasing to lessees present in the rules issued by FASB and IASB that persisted after the harmonization process. For this, an investigation was carried out on accounting practices related to leasing with a focus on the most recent standards, on the other documents issued by the boards and on the relevant literature on the subject. The study is relevant because it highlights differences between accounting information produced in accordance with the north american standard and with the international standard and the resulting comparability issues that arises from it. As a main difference, it is pointed out that the FASB, unlike the IASB, understood that assets arising from operational and financial leasing contracts must be segregated in the balance sheet, considering that, in the FASB´s view, the contracts have different economic substances. However, this difference did not harm the consensus of the two bodies in understanding the essence to be given to the leasing contracts, which started to seek to evidence whether the leasing operation contains the right to use the asset and the generation of benefits for the company, regardless to be a financing or a rent.
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