At this meeting the boards discussed:
- Transition under the partial derecognition approach to lessor accounting
- Lessor accounting models
- Accounting for arrangements with service and lease components
- Accounting for purchase options.
Transition under the partial derecognition approach to lessor accounting
The boards tentatively decided that lessors should recognise and measure all outstanding leases at the date of initial application of the proposed new leases requirements. The recognised lease receivable should be measured at the present value of the remaining lease payments. The recognised residual asset should be measured at fair value.
Lessor accounting models
The boards tentatively decided to use a hybrid lessor accounting model. Under that hybrid model, the lessor would use a performance obligation approach to lessor accounting for leases that expose the lessor to significant risks and benefits associated with the underlying asset. A derecognition approach would be applied to all other leases.
Accounting for arrangements with service and lease components
The boards discussed how lessors should account for lease arrangements that contain both lease components and service components. The boards asked the staff to provide examples of how to apply two different approaches to separating the lease components from the service components of a contract for a lessee and for a lessor under both approaches to lessor accounting. Those examples should include instances when the lease components are distinct from the service components, and when they are not distinct.
Accounting for purchase options
The boards tentatively decided that both lessees and lessors should account for purchase options only when they are exercised.