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Q: Information on the History of Lease Accounting ( Answered,   0 Comments )
Subject: Information on the History of Lease Accounting
Category: Business and Money > Accounting
Asked by: icehockyplayer-ga
List Price: $21.00
Posted: 20 Apr 2005 17:59 PDT
Expires: 20 May 2005 17:59 PDT
Question ID: 512056
I need information pretaining to the "history of lease accounting"
I need to know how it started, changes, and present day situation

Some criteria:

-its been changed 4 times since early 30s (when and why)
-what changes were made
-why were the changes made

Research in generally accepted accounting principles

(on a side note, I don't know if $20 is what it should be at, sorry
I'm a college student, but if the information is good and exactly what
I need, I will definetly give a tip)

Request for Question Clarification by omnivorous-ga on 21 Apr 2005 17:27 PDT
Icehockyplayer --

I have some clear indications of how things were handled from 1959
onward and good web resources for 1976 onward.  Since 1976 there have
been 8 major changes in accounting for leases, as they've become more
prevalent (and in a few cases mis-used to manipulate financial

However, I only have the vaguest references to the SEC and AICPA going
back to the 1930s.  Let me know if you want me to post what I've dug
up.  It would be a good start but not complete by any means.

Best regards,


Clarification of Question by icehockyplayer-ga on 21 Apr 2005 18:21 PDT

I see you found 8 major changes in the past 30 or so years. I wouldn't
mind reading all 8 or what you have dug up, but if you have any MAJOR
overhauls that have happened since 1930 or even a little before that
(teacher mentioned there were 4 major changes). Also any information
just in general would help as well, such as maybe:

-who is responsible for these "official changes"
-what is the process of a change (how does it begin, pass, and carried out)
-who exactly do the changes affect and how
-any general information solely on "lease accounting" might help as well. 

I appreciate it. And if you have any other questions please don't
hesititate to post and ask for a better clarification. Take care

(I like what you've said you've found already, so please don't discard
any of what you've already found, the few things above were just to
add to it)

Request for Question Clarification by omnivorous-ga on 21 Apr 2005 18:30 PDT
Icehockyplayer --

I'll post what I have on Friday morning, as it's getting late.  

But you may have a potential book here -- there is not a ton of good
reference material on accounting history.  Even the professional
organizations like AICPA are just concerned with the here-and-now. 
But you'll have to find a catchy title, like Peter Bernstein's
"Against the Gods" (which is about the history of financial risk).

Best regards,

Subject: Re: Information on the History of Lease Accounting
Answered By: omnivorous-ga on 22 Apr 2005 08:07 PDT
Icehockyplayer ?

My degree?s in finance, so I have some pretty good accounting
resources here but this search has proved more nettlesome than I?d
ever have guessed. However, I think that there are some good
suggestions at the end for more research.  And since you probably have
an academic library nearby you may be in a position to extend this.

POST 1976

In 1973, the Financial Accounting Standards Board (FASB) was formally
set as the rule-making accounting authority by the U.S. Securities &
Exchange Commission (SEC).

It?s important to note that there is an international corollary, the
International Accounting Standards Board (IASB), based in London, that
was established in January 2001.  Its predecessor was the
International Accounting Standards Committee (IASC), founded in 1973
by accounting bodies in Australia, Canada, France, Germany, Japan,
Mexico, the Netherlands, the United Kingdom, Ireland AND the U.S.  The
two organizations collaborate ? and FASB even has international
standards as part of its mission ? but occasionally they are
out-of-synch on technical rulings, which can result in differences in
earnings per share and even revenues.

FASB set its initial leasing guidelines in November, 1976 under
FAS-13, ?Accounting for Leases.?  The FASB site has all of the FAS
bulletins, as well as interpretations of financial standards on its
excellent website.

FASB Statements

I can?t quote from the FASB page because of their draconian copyright
policy, but here?s a brief summary of FASB standards:

FAS-13: Accounting for Leases, includes a separation of capital and
operating leases (November, 1976)

FAS-22 Changes in the Provisions of Lease Agreements Resulting from
Refunding of Tax-Exempt Debt (June, 1978)

FAS-23 Inception of the Lease, inception is defined at completion of
construction of property.  Makes several amendments to FAS-13.
(August, 1978)

FAS-27: Classification of Renewals or Extensions of Existing
Sales-Type or Direct Financing Leases (May, 1979).

FAS-28: Accounting for Sales with Leasebacks.  An amendment to FAS-13,
it Includes definitions of whether the lease is a capital or operating
lease. (May, 1979)

FAS-29: Determining Contingent Rentals. (June, 1979)

FAS-91: Accounting for Nonrefundable Fees and Costs Associated with
Originating or Acquiring Loans and Initial Direct Costs of Leases
(December, 1986).  This was specifically aimed at standards for fees
and costs associated with financial institutions.

FAS-98: Accounting for Leases (May, 1998):
?	Sale-Leaseback Transactions Involving Real Estate
?	Sales-Type Leases of Real Estate
?	Definition of Lease Term
?	Initial Direct Costs of Direct Financing Leases

FAS-98 deals with penalties and also with sale-leasebacks that involve
real estate and depreciable equipment.

It?s worth noting the FINs or Financial Interpretations, as well.  You
may find some historical information in them and they carry almost as
much weight as the FASB statements:

FIN-19: Less Guarantee of the Residual Value of Leased Property (October, 1977)

FIN-21: Accounting for Leases in a Business Combination (April, 1978)

FIN-23: Leases of Certain Property Owned by a Governmental Unit or
Authority (August, 1978)

FIN-24: Leases Involving Only Part of a Building (September, 1978) 

FIN-26: Accounting for Purchase of a Leased Asset by the Lessee During
the Term of the Lease (September, 1978)

FIN-27: Accounting for a Loss on a Sublease (November, 1978)

PERIOD OF 1959-1976

In 1959, the American Institute of Certified Public Accountants
(AICPA) created the Accounting Principles Board (APB). Its major
objective was to issue official pronouncements, called opinions, on
accounting principles. These opinions represented part of the
development of financial reporting standards ? which today we call
generally accepted accounting principles (GAAP).

The APB issued Statement on Auditing Standards (SAS), Statements of
Position (SOP), Issues Papers, Technical Bulletins, and more.  The
AICPA website isn?t particularly helpful, but this Florida
International University Library page shows a reference book called
Accounting Principles Board Opinions that lists all of the rulings:

Services like Thomson-Gale Checkpoint also have them, as well as their
predecessors, the Accounting Research Bulletins.  Your business school
library may well have the Checkpoint service available:

PERIOD OF 1933-1959

With the establishment of the SEC in 1933, the AICPA and the SEC began
to set standards for account.  It led to the Accounting Research
Bulletins, first published in 1939 and continuing to 1953.


The ?fourth? change may be the process set up by the Sarbanes-Oxley
Act of 2002, a major change in financial management resulting from the
Enron scandal (among others).  Sarbanes-Oxley is still being modified
as companies react to the costs, but it did set up a Public Company
Accounting Oversight Board (PCAOB) responsible for accounting
standards and enforcement.

Emory Goizueta Business School
?Accounting -- Standards Setting Process? (March 9, 2005)

Here?s the PCAOB home page, though they?re working more on auditing
issues at this stage than financial standards:

Public Company Auditing Oversight Board



You may have access to the older APB rulings and the Accounting
Research Bulletins at your business school library.  They aren?t
maintained in most public libraries.

I?d also suggest older copies of the following two books, as they?ll
likely have reference to earlier standards, even if only in a

Accountants Handbook, John Wiley & Sons Publisher

FASB Accounting Standards, McGraw-Hill Professional Publishing


One final note: what we?ve found here is not unusual for Internet
research.  Sources online tend to be superb back to 1995; then get
weaker for every decade.  Often material before 1980 is only available
via a fee-based service like Thomson-Gale.

Google search strategy:
FASB history leasing
?pre-FASB? history leasing
Search of FASB, AICPA, IASB websites
AICPA Accounting Principles Board
AICPA SEC history

Best regards,

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