The ACT is generally in agreement with the overall approach to a ‘right-of-use’ accounting model whereby both lessee and lessor record assets and liabilities arising from lease contracts. However we believe that the right of use model is not appropriate for all leases, particularly property leases, and hence these should not result in lessees capitalising these assets. The capitalisation of Type B or property leases proposed by the IASB has focused on recognising the lease liability without due consideration as to whether the resultant capitalised leased asset is a meaningful figure.
The ACT’s response to the IASB can be found on the link below: