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Leverage Lease Accounting Project

Thursday, December 7, 2006

The FASB project related to leveraged leases is to clarify the application of FASB #13, "Accounting for Leases", to transactions classified as leveraged leases. Specifically, the project will address various issues that have arisen regarding the accounting for potential income tax settlements in connection with leveraged leases. The final FASB Staff Position was issued on July 13, 2006. A copy of the position can be found below.

The FASB and the International Accounting Standards Board (IASB) added a joint lease accounting project on their agendas on July 19, 2006. On December 7, 2006, the Boards announced the membership of the working group that will assist with work related to the project. The group consists of senior professionals with extensive experience in the leasing industry or with responsibility for the preparation, analysis and audit of financial statements of entities with significant leasing transactions. The working group’s initial meeting is scheduled to take place sometime during January 2007. A copy of the press release announcing the boards’ announcement about membership of the lease accounting working group can be found below.

› FASB Staff Position - July 13, 2006 “Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction”

› FASB Press Release – “Leverage Lease Accounting Working Group”