IIR-Kongress CITOP 2005 am 28./29. September 2005 in Berlin:
Eigener Beitrag:
Kaufen, leasen oder mieten? Innovative Finanzierungsformen in der Fahrzeugbeschaffung
Donnerstag, September 29, 2005
Dienstag, September 27, 2005
FASB Leveraged Leases
Project Updates
Leveraged Leases
Last Updated: September 27, 2005 (Updated sections are indicated with an asterisk *)
The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
Objective
Decisions Reached at the Last Meeting
*Immediate Plans
Board Meetings/Public Meeting Dates
History and Background
Contact Information
Objective
The objective of this project is to clarify the application of FASB Statement No. 13, Accounting for Leases, to transactions classified as leveraged leases. Specifically, this project will address various issues that have arisen regarding the accounting for potential income tax settlements in connection with leveraged leases.
Decisions Reached at the Last Meeting
At the March 2, 2005 Board meeting, the Board affirmed its previous decision from the November 17, 2004 Board meeting that a change in the timing alone of the realization of tax benefits from a leveraged lease will require a recalculation of that lease. Additionally, the Board affirmed its previous decision that a reevaluation of lease classification is required if at any time a revision of an important assumption requires a recalculation of a leveraged lease.
The Board also decided:
* The scope of the guidance should include all leveraged leases.
* The types of changes in the timing of the realization of tax benefits should be those directly related to the leveraged lease (for example, excluding alternative minimum tax (AMT) and net operating loss (NOL) carryforwards). The Board did not change the guidance for AMT in Issue 10 of EITF Issue No. 87-8, “Tax Reform Act of 1986: Issues Related to the Alternative Minimum Tax.”
* A threshold should not be incorporated into the guidance for determining whether a recalculation should be performed for a change in the timing of the realization of tax benefits.
* The guidance will be issued as an FASB Staff Position.
* An entity should recognize the cumulative effect of initially applying this guidance as a change in accounting principle as described in paragraph 20 of APB Opinion No. 20, Accounting Changes.
* The guidance will be effective for fiscal years ending after December 15, 2005.
*Immediate Plans
A proposed FSP was issued on July 13, 2005 for a 60-day comment period that ended September 12, 2005. View the comment letters received. The final FSP is expected to be issued in the fourth quarter of 2005.
Board Meeting and Public Meeting Dates
The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final Statement or Interpretation.
The following are links to the minutes for each meeting.
March 2, 2005 Board Meeting—Discussion of the scope, threshold, form, transition method, and effective date for the guidance.
November 17, 2004 Board Meeting—Discussion of whether a change in the timing alone of the realization of tax benefits in a leveraged lease should result in a recalculation of the leveraged lease and whether a lessor should reevaluate the classification of a leveraged lease when recalculating the lease for a change in the timing of the realization of tax benefits.
History and Background
Recently, a number of issues have arisen regarding the accounting for potential income tax settlements in connection with transaction classified as leveraged leases under the provisions of Statement 13. These issues may have applicability to certain entities that are lessors or have made equity investments in entities formed to own the property being leased. While these issues are applicable for all leveraged lease transactions, the most significant impact will likely stem from transactions commonly referred to as “LILO” (lease-in/lease-out) transactions and “SILO” (sale-in/lease-out) transactions. LILO and SILO transactions are typically classified by lessors as leveraged leases in accordance with Statement 13. The Internal Revenue Service (IRS) issued two Revenue Rulings which state that the LILO transaction lacks the potential for significant economic consequences other than the creation of tax benefits and, therefore, lacks economic substance. Additionally, in October 2004, the American Jobs Creation Act of 2004 was enacted which restricts the tax benefits associated with SILO transactions.
It is the FASB staff’s understanding that the IRS has settled or is in the process of settling with many U.S. companies that have entered into these types of transactions. As part of that settlement, a lessor may suffer a permanent loss of tax benefits or a temporary loss of tax benefits. A permanent loss of tax benefits would result in a change in amount of tax benefits to be realized over the lease term while a temporary loss of tax benefits would result in a change in timing of tax benefits to be realized over the lease term.
As a result of the income tax settlements or potential settlements, questions have arisen regarding the impact on leveraged lease accounting when a change in timing of tax benefits occurs.
Leveraged Leases
Last Updated: September 27, 2005 (Updated sections are indicated with an asterisk *)
The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
Objective
Decisions Reached at the Last Meeting
*Immediate Plans
Board Meetings/Public Meeting Dates
History and Background
Contact Information
Objective
The objective of this project is to clarify the application of FASB Statement No. 13, Accounting for Leases, to transactions classified as leveraged leases. Specifically, this project will address various issues that have arisen regarding the accounting for potential income tax settlements in connection with leveraged leases.
Decisions Reached at the Last Meeting
At the March 2, 2005 Board meeting, the Board affirmed its previous decision from the November 17, 2004 Board meeting that a change in the timing alone of the realization of tax benefits from a leveraged lease will require a recalculation of that lease. Additionally, the Board affirmed its previous decision that a reevaluation of lease classification is required if at any time a revision of an important assumption requires a recalculation of a leveraged lease.
The Board also decided:
* The scope of the guidance should include all leveraged leases.
* The types of changes in the timing of the realization of tax benefits should be those directly related to the leveraged lease (for example, excluding alternative minimum tax (AMT) and net operating loss (NOL) carryforwards). The Board did not change the guidance for AMT in Issue 10 of EITF Issue No. 87-8, “Tax Reform Act of 1986: Issues Related to the Alternative Minimum Tax.”
* A threshold should not be incorporated into the guidance for determining whether a recalculation should be performed for a change in the timing of the realization of tax benefits.
* The guidance will be issued as an FASB Staff Position.
* An entity should recognize the cumulative effect of initially applying this guidance as a change in accounting principle as described in paragraph 20 of APB Opinion No. 20, Accounting Changes.
* The guidance will be effective for fiscal years ending after December 15, 2005.
*Immediate Plans
A proposed FSP was issued on July 13, 2005 for a 60-day comment period that ended September 12, 2005. View the comment letters received. The final FSP is expected to be issued in the fourth quarter of 2005.
Board Meeting and Public Meeting Dates
The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final Statement or Interpretation.
The following are links to the minutes for each meeting.
March 2, 2005 Board Meeting—Discussion of the scope, threshold, form, transition method, and effective date for the guidance.
November 17, 2004 Board Meeting—Discussion of whether a change in the timing alone of the realization of tax benefits in a leveraged lease should result in a recalculation of the leveraged lease and whether a lessor should reevaluate the classification of a leveraged lease when recalculating the lease for a change in the timing of the realization of tax benefits.
History and Background
Recently, a number of issues have arisen regarding the accounting for potential income tax settlements in connection with transaction classified as leveraged leases under the provisions of Statement 13. These issues may have applicability to certain entities that are lessors or have made equity investments in entities formed to own the property being leased. While these issues are applicable for all leveraged lease transactions, the most significant impact will likely stem from transactions commonly referred to as “LILO” (lease-in/lease-out) transactions and “SILO” (sale-in/lease-out) transactions. LILO and SILO transactions are typically classified by lessors as leveraged leases in accordance with Statement 13. The Internal Revenue Service (IRS) issued two Revenue Rulings which state that the LILO transaction lacks the potential for significant economic consequences other than the creation of tax benefits and, therefore, lacks economic substance. Additionally, in October 2004, the American Jobs Creation Act of 2004 was enacted which restricts the tax benefits associated with SILO transactions.
It is the FASB staff’s understanding that the IRS has settled or is in the process of settling with many U.S. companies that have entered into these types of transactions. As part of that settlement, a lessor may suffer a permanent loss of tax benefits or a temporary loss of tax benefits. A permanent loss of tax benefits would result in a change in amount of tax benefits to be realized over the lease term while a temporary loss of tax benefits would result in a change in timing of tax benefits to be realized over the lease term.
As a result of the income tax settlements or potential settlements, questions have arisen regarding the impact on leveraged lease accounting when a change in timing of tax benefits occurs.
Abonnieren
Posts (Atom)