May 2010

Leases Headed for the Balance Sheet

From CFO.com.

The upcoming joint FASB/IASB exposure draft on lease accounting will put an end to off-balance-sheet treatment for leases, while throwing in some new complications.

Equipment leasing is finally on the upswing. The volume of new commercial-equipment leasing rose 15% in April, compared with the same period in 2009. That's the first year-over-year increase seen in the $518 billion equipment-finance market since July 2008, according to the Equipment Leasing and Finance Association, which released its latest data on Tuesday. Month-to-month volume was up too, rising 9% to $4.7 billion. The uptick is "a positive sign that businesses are starting to invest in capital assets," says ELFA president William Sutton.

But while the rising tide is welcome, accounting for leased equipment, as well as leased property, may soon get more complicated.

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