Today ELFA President and CEO William G. Sutton, CAE, sent the following message to all ELFA members:
We need your help! You and your customers have only two weeks left to comment on the lease accounting Exposure Draft. ELFA is urging all lessees, their financing partners and other stakeholders to submit comment letters by the Sept. 13 deadline. Only then will the standards-setting bodies be aware of the real-life business impact if the proposed rules changes are adopted. In addition to writing your own comment letter, please send the following urgent message to your customers:
Dear Customer:
You may have heard about a proposal that would change how leases are accounted for on corporate balance sheets. Did you know that you only have until Sept. 13 to make your voice heard on the proposal?
Background
As part of the global effort to establish uniform corporate financial accounting standards, the Financial Accounting Standards Board and the International Accounting Standards Board issued an Exposure Draft for a new lease accounting standard on May 16. The Boards’ intent is to record lease transactions on balance sheet. Many businesses do not object to having to record leases on their books. Rather, they object to how the proposal would require them to account for and report lease transactions, contending that aspects of the proposal are too complex, impose burdensome regulation on businesses and do not accurately reflect the economics of the lease transaction.
What You Can Do
Sjubmit a comment letter on the proposal by Sept. 13. The quickest option is to submit your comments via the online feedback form. Or, you can write a letter of your own. Find a link to the Exposure Draft and tips for submitting an effective comment letter on the Equipment Leasing and Finance Association’s website. You can also watch a short video message on this issue.
The Good News
Leases account for hundreds of billions of dollars in equipment acquisition annually, contributing not only to businesses’ success, but also to economic growth, manufacturing and jobs. The good news is that there are many benefits to leasing, and the primary reasons to lease equipment will remain intact despite the lease accounting proposal, from maintaining cash flow, to preserving capital, to obtaining flexible financial solutions, to avoiding obsolescence. But, the proposed changes to the current lease accounting standard are unnecessarily complex and are not an improvement over current rules that apply to businesses like yours. It is very important that the Boards receive well-reasoned and thoughtful comment letters from business practitioners who will be impacted by the proposed new rules. Thank you for making your voice heard.