The world’s two major accounting standard setters are seeking nominations for candidates to participate in a working group to overhaul lease-accounting rules.

The working group will comprise individuals from a variety of backgrounds: preparers, auditors, and users of financial statements; subject-matter experts; and others, according to a joint announcement by the Financial Accounting Standards Board and the International Accounting Standards Board. Earlier this week, FASB and the IASB added a joint lease-accounting project to their respective agendas.

The two boards stressed that the purpose of the working group is not to develop proposals, but rather to provide views and practical advice on the concepts, ideas, and proposals developed by the boards and their staffs. “The role of working group members is to provide information and practical insights from their perspectives,” according to the announcement.

The working group members are expected to serve as a source of information for the staffs, and as a sounding board for the staffs and board members. Input from the working group will be sought in a number of ways, including through E-mail messages, video conferences, and face-to-face meetings.

Working group members are unpaid volunteers, and the boards generally do not reimburse travel and other expenses. The closing date for nominations is September 30, and a meeting of the working group is tentatively scheduled for January 2007 in London.

FASB’s current lease-accounting rules (FAS No. 13, Accounting for Leases) allow companies to keep certain leases off their balance sheets. The subject has been a bone of contention between corporate finance executives, most of whom would like the opportunity to remove leasing liabilities from balance sheets, and investors, who mainly claim that the off-balance-sheet treatment does not provide an accurate financial picture of the company.

According to FASB chairman Robert Herz, the new rules are not likely to be issued until 2009. The timeline for amending FAS 13 is as follows: in 2007, the FASB and IASB staffs will meet to develop issues to be considered, deliberate the issues, and request public comment; in 2008, a discussion paper summarizing the preliminary views of both boards will be published; and in 2009, it is likely that new rules will be issued.

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