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US CFOs support lease accounting reform

Eighty-one percent of US CFOs support the reforming of lease accounting rules and many are in favor of putting lease obligations on the balance sheet, according to a survey by Grant Thornton US.

The International Accounting Standards Board (IASB) is due to release a lease accounting exposure draft in June.

This would replace current rules that allow companies to keep many lease obligations off their balance sheets.

Grand Thornton professional standards partner John Hepp said the level of support for recording leases obligations on balance sheets depends of how they are measured.

Most respondents preferred to measure the obligations as either the non-cancellable amounts due, or those amounts plus amounts that are highly probable and reliably measurable.

This is in contrast to the more comprehensive estimates currently under consideration by the US Financial Accounting Standards Board and the IASB.

“The level of support depends on the boards using a simple, reliable measure of the lease obligation rather than a complex model that incorporates contingent costs or optional renewal periods other than bargain renewals,” Hepp explained.

The Grant Thornton survey gathered the opinions of 496 US CFOs and senior controllers during March and April 2010.

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