CFO.com reports the new lease accounting proposal agreed upon by the FASB and IASB is still getting pummeled by finance executives. Ralph Petta, chief operating officer at the Equipment Leasing and Finance Association (ELFA) notes that the boards’ decision to make the equipment lease expense recognition front-loaded has created a host of problems. “It makes the accounting more complex than it needs to be,” he says. Since equipment leases have not previously been front-loaded, lessees would have to do a whole lot more calculating of asset values if the plan goes through.

While ELFA supports having leases recorded on lessees’ balance sheets and incorporating two types of leases for property and equipment, the association’s leaders find fault with the way the boards are addressing those issues now.

The CFO article further notes critics of the proposal like Rod Hurd, CFO of Bridgeway Capital Advisors and chair of ELFA’s financial committee, who doenn’t think the standard setters’ plan correctly addresses most lessees’ accounting needs.

For one thing, he notes the “economics” of the FASB/IASB proposal don’t jibe with general accounting principles. In a front-loaded lease on a balance sheet, as in the case of an equipment lease, the asset appears to be worth less than its present economic value, notes Hurd.

FASB and IASB’s front-loaded approach for equipment leases considers all equipment leases as purchases, perhaps reasoning that, in many cases, short-term lessees resemble owners more than renters. ELFA and others, however, say that the concept doesn’t match reality.