Credit analysts have told the Financial Accounting Standards Board and the International Accounting Standards Board that they generally support putting leases on the balance sheet, but equity analysts had some reservations, according to an IASB staff report of 2013 outreach activities.

FASB and IASB say they held more than 35 separate meetings with more than 220 investors and analysts from May through September to get their feedback on a proposed accounting standard that would bring all leases on the corporate balance sheet. The IASB staff report says credit analysts generally agreed that leases create assets and liabilities that should be recognized on the balance sheet much the way a debt-like or interest-bearing obligation would be recognized. They do their best, they say, to get what they can out of companies' note disclosures regarding operating leases, but current disclosures are not sufficient to fully explain corporate lease obligations.

Equity analysts, on the other hand, told FASB and IASB they agree that operating leases create assets and liabilities, and analysts generally adjust financial statement figures to reflect what they believe a company's lease obligation to be. However, they are concerned about changes to financial reporting that could disrupt trend information and overturn the models they use, which they've grown to trust. Many equity analysts told the boards they are concerned the boards' proposed standard would not produce the information they need to fully understand a company's leased assets, especially for shorter-term leases. Equity analysts also differed in their view of the importance the proposal places on the contractual commitments associated with leases.

The wavering view is consistent with what the boards heard when they met with FASB's Investor Advisory Group in late August and heard they should simply abandon the entire proposal and focus on new disclosure requirements. IAG member David Trainer, CEO of research firm New Constructs, said it's a good idea to get more transparency around lease liabilities. “However, I think the complexities of the underlying activity make it almost impossible to create a one-size-fits-all solution that we can just put on the balance sheet,” he said. “The most decision-useful information is to enhance disclosure to let analysts who, given their multiple potential interpretations, can do with it what they wish.”

The outreach staff report says analysts and investors alike told FASB and IASB they agree that leases should be measured and recognized based on the variable lease payments and options, but excluding things like optional renewal periods and other lease features that would be hard to measure. One particular credit rating agency, however, wanted to see estimates of expected payments in the future, including expected variable lease payments and optional payments. The report does not name which agency held that view.

FASB and IASB also are sorting through 598 comment letters offering views on the proposals, and are hosting a series of roundtable meetings globally to gather further feedback. The board expect to begin redeliberating the proposal based on all that feedback at some point before the year ends. The boards have not said when they expect to issue a final standard or when it might take effect.