077 Concerns about the right-of-use model of Lease
We wrote on the “right-of-use model” of the Lease draft announced by IASB and FASB before. ASBJ is considering the revision of the lease standard after the announcement was made, and collecting opinions for the discussion point of the lease accounting.
According to the right-of-use model, all of the lease transactions are regarded as the acquisition of the right of use of the lease assets, including the operating lease. This could get rid of the arbitrariness of the category between the operating lease and finance lease. However, there could be a variety of lease contracts, and their nature as services or length of the lease period could differ. Therefore, some criticize the model in the way that the unified accounting treatment would not reflect the economic consequence of each transaction. Besides, as they need to recognize the operating lease that is not currently subject to the recognition, its cost could exceed the benefit of the users of financial statements.
So far, ASBJ are still discussing the collected comments, and so wee need to pay attention to the revision to come.
