Fasb Comment Letter

In: Business and Management

Submitted By yunqsun
Words 907
Pages 4
September 16, 13

Financial Accounting Standards Board
401 Merritt 7
PO Box 5116
Norwalk CT 06856-5116

Dear FASB Technical Director,

Thank you for your time and efforts to compose the exposure draft on leases to improve the accuracy of financial reporting. As accountants in Boulder Leasing Corporation, we believe that the new accounting models for both lessee and lessor will increase the accuracy of financial reporting by recognizing leasing assets on lessee’s balance sheet and disclosing the value and risks related to residual assets of lessor. However, we show great concerns that the revised exposure draft may lead to potential misstatements of assets and liabilities and users’ difficulty of making decisions. Thus, we hope to elaborate our concerns on how the new exposure draft may influence the following aspects:

IDENTIFYING A LEASE
We believe that the proposed definition of a lease in the revised exposure draft will greatly eliminate the situations when lessees keep their large amount of operating leasing assets off balance sheet. This change will improve the accuracy of financial reporting by requiring both lessees and lessors to reveal the leased asset on financial statements. The information users can acquire a better understanding and transparency of the leasing transactions from both parties.

But the more specific and complicated criteria of identifying a lease in the proposed exposure draft may cause negative impacts for users of the financial reporting. As the boards require more extensive reconciliations of financial statements to provide more specific information, we are concerned about the possibility that the users will find the information in the footnotes less accessible to make their final decisions.

GUARANTEED RESIDUAL VALUES
In the proposed exposure draft, we also observe potential problems and risks related to the guaranteed…...

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