ALEXANDRIA, VA – An overhaul of lease accounting rules, in place since 1976, is the focus of a recently announced joint effort by the Federal Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), according to the Truck Renting and Leasing Association (TRALA). The two organizations voted separately on July 19 to add a reconsideration of current lease accounting rules to their formal agendas. The action was prompted by a recent report from the Securities and Exchange Commission (SEC) that estimated up to $1.25 trillion in future obligations related to operating leases are not recognized on lessees’ balance sheets. This SEC report on the extent and transparency of off-balance sheet arrangements was mandated by Congress in the Sarbanes-Oxley Act of 2002. TRALA will be working with its industry allies to educate FASB members on current accounting practices within the vehicle leasing industry. TRALA plans to be a participant with an international working group now being established to provide expertise and practical advice to the FASB and IASB as they consider a rewrite of lease accounting rules. The preliminary timeline for the project calls for a formal discussion paper on lease accounting rules to be issued in 2008, followed by a comment period and the release of a final rule in 2009. The initial plans for the joint FASB-IASB project include the consideration of both lessee and lessor balance sheets. FASB staff members, however, have suggested that new accounting standards for lessees will take priority.