BC5 In March 2009 the Boards published a joint Discussion Paper Leases: Preliminary Views. The Discussion Paper set out the Boards’ preliminary views on lessee accounting, proposing a ‘right-of-use’ accounting model. Feedback on the Discussion Paper generally supported the ‘right-of-use’ model for lessees, by which a lessee would recognise a right-of-use asset and a lease liability at the commencement date of the lease. The Discussion Paper did not discuss lessor accounting in any detail.

BC6 In August 2010 the Boards published a joint Exposure Draft Leases (the ‘2010 Exposure Draft’). The Boards developed the 2010 Exposure Draft after considering the comment letters received on the Discussion Paper, as well as input obtained from their Lease Accounting Working Group and from others who were interested in the financial reporting of leases. The 2010 Exposure Draft:

(a) further developed the ‘right-of-use’ accounting model for lessees that had been proposed in the Discussion Paper, and that respondents had generally supported.

(b) added proposals for changes to lessor accounting. The Boards decided to include lessor accounting in the proposals in response to comments from respondents to the Discussion Paper. Some respondents had recommended that the Boards develop accounting models for lessees and lessors on the basis of a consistent rationale. The Boards also saw merit in developing lessor accounting proposals at the same time as they were developing proposals for recognising revenue (which the IASB subsequently finalised in IFRS 15 Revenue from Contracts with Customers).