EBA欧洲银行-cebs1235_2010-12-16-28CEBS-comments-to-ED-2010-9-Leases29_5页_230kb

CEBS Comments on IASB Exposure Draft ED/2010/9: Leases

Core Content

The Committee of European Banking Supervisors (CEBS) has provided detailed feedback on the IASB Exposure Draft ED/2010/9: Leases, focusing on the proposed changes to lease accounting and the alignment with the economic reality of lease transactions. CEBS supports the IASB's goal of eliminating the distinction between operating and finance leases, but raises several concerns regarding the practical application and comparability of the proposed standard.

Main Views

• Support for transparency and alignment with economic reality: CEBS acknowledges the IASB's efforts to improve transparency and align lease accounting with the economic substance of the transaction. This would enhance the comparability and quality of financial statements.

• Preference for 'risks and benefits' over 'control': CEBS prefers the concept of transferring 'significant risks and benefits' over the legal "control" concept for determining derecognition. This was previously highlighted in their comments on ED2009/3.

• Concerns over complexity and judgment: CEBS is concerned that the proposed two approaches (derecognition vs. performance obligation) introduce unnecessary complexity and leave significant scope for judgment, which may reduce comparability across entities.

• Need for clarity and simplification: CEBS encourages the IASB to simplify the standard and clarify that the accounting treatment (derecognition or performance obligation) is not optional but mandatory based on the lessor's exposure to significant risks and benefits.

• Double counting of assets: CEBS warns that the proposed approaches for lessor and lessee accounting may lead to double counting of the same underlying asset, which should be avoided.

Key Information

Lessor Accounting

• Two approaches: The ED proposes two approaches for lessor accounting: derecognition and performance obligation.
• Simplification needed: CEBS suggests that the standard should be simplified by focusing on one criterion—lessor's exposure to significant risks and benefits.
• Clarification of BC 27: CEBS recommends clarifying BC 27, which refers to the business model of the reporting entity, to ensure it does not overshadow the standard's criteria on risk and benefits.
• Unique definition of "true sale": CEBS advocates for a consistent definition of "true sale" across different accounting standards to avoid ambiguity.

Lease Term and Optionalities

• Complexity in lease term estimation: CEBS is concerned about the complexity involved in estimating the lease term, particularly when considering expected outcomes, contingent rentals, and residual value guarantees.
• Remeasurement of right-of-use assets: The ED allows lessees to revalue right-of-use assets for each class of property, plant, and equipment, which CEBS believes could reduce comparability and introduce volatility in equity.
• Divergence with US GAAP: CEBS notes that this remeasurement option is not allowed under US GAAP, potentially creating a divergence between IFRS and US standards.

Short Term Leases

• Support for simplification: CEBS supports the simplification of accounting for short term leases.
• Concerns over practical relief: They believe the proposed approach does not provide sufficient relief, as lessees would still need to recognize assets and liabilities.
• Distinguish lease from service contract: CEBS encourages the IASB to further investigate how to differentiate lease contracts from service contracts to allow for similar simplifications.
• Materiality considerations: CEBS suggests applying materiality considerations to avoid the potential for structuring leases to benefit from short-term treatment.

Conclusion

CEBS recommends that the IASB reconsider the proposed standard to ensure clarity, reduce complexity, and improve comparability across financial statements. They also encourage the development of a converged set of lease accounting standards with the FASB, to benefit global investors and users of financial information.