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The Financial Accounting Standards Board and International Accounting Standards Board in London have agreed to undertake a joint project designed to overhaul FAS 13, the lease accounting rules in place since 1976. The decision to add a leasing project reflects the FASB's concern that the current accounting in this area does not clearly portray the resources and obligations arising from lease transactions.
Before making this decision, the FASB consulted with its constituents, including the FASB's Financial Account-ing Standards Advisory Council ('FASAC'), its User Advisory Council ('UAC'), and the SEC staff. Many of those constituents urged the FASB to undertake a project, expressing the view that current lease accounting standards fail to provide complete and transparent information. In fact, the SEC staff formally raised issues with, and recommended improvements to, this area as part of its June 2005 report to Congress on off-balance sheet arrangements as required by the Sarbanes-Oxley Act of 2002.
The proposed timetable for the project is as follows: This year, the FASB staff is conducting research on the scope and implications of the project; in 2007, the Board will begin deliberations; in 2008, a Preliminary Views document will be issued and comments will be solicited from interested parties; in 2009, a formal Exposure Draft will be issued for comment, with final guidance released that year as well.
FASB has stated that it wants to examine both lessee and lessor accounting, but it is concerned that the complex issues involved in lessor accounting not delay progress on the project. According to the Equipment Leasing Association, FASB Chairman Herz and at least one other member of the Board specifically mentioned that the issue of materiality for small ticket transactions would be taken into account as the Board deliberates, and that the Board will consider the cost-benefit of any new rules change. Both the FASB and IASB are in the process of assembling a working group of experts to assist the Board and staff as they work through and try to understand the issues involved. The Board has requested that the ELA be represented in this work group, and the Association has agreed to do so.
In a separate announcement, on July 13, the FASB issued a staff position that will require companies to recalculate their leveraged leases if there is a change or projected change in the timing of cash flows relating to income taxes generated by the leveraged lease. The FSP is being issued concurrent with an interpretation of FASB Statement No. 109, Accounting for Income Taxes. The guidance in this FSP shall be applied to fiscal years beginning after Dec. 15, 2006.
The law firm of Vedder Price of Chicago has announced that it opened a Washington, DC, office effective Aug. 15. Edward K. Gross, formerly a principal at Ober Kaler and a former chair of that firm's Lending and Leasing Group, and a member of LJN's Equipment Leasing Newsletter's Board of Editors will join Vedder Price's Equipment Finance Group. Gross represents bank-affiliated and large independent equipment financing companies in all aspects of equipment finance, especially business aircraft financings. This representation includes documenting, structuring, negotiating, syndicating, and enforcing equipment finance transactions for more than 20 years. He has prepared middle and capital markets lease, loan, and syndication forms for some of the largest equipment finance companies in the industry.
Merrill Lynch Capital of New York has announced that it will begin offering equipment financing and business aviation financing for customers in Canada. Dan Porter, a 20-year veteran of the equipment finance industry, has been hired to lead the effort and will be based in Toronto. The company provides equipment financing up to $75 million for public companies and private corporations in a broad range of industries including manufacturing, distribution, transportation, energy, automotive, marine, mining services, food processing, and technology.
Main Street National Bank of Kingwood, TX, has named John Lee as senior vice president and general counsel. During his 35-year career in the equipment leasing industry, Lee has worked in private practice at Shearman & Sterling in New York and Nixon Peabody LLP in Boston. He also served on the in-house legal staff at Xerox Corporation, First Sierra Financial, and American Express. Main Street Bank maintains two banking offices in the Houston market and eight national equipment lease sales offices.
Key Equipment Finance of Superior, CO, has announced the appointment of Philip E. Neason and Bryan Potthoff to vice president positions within its Lease Advisory Services group, a small team focused on providing value-added products and services nationwide to prospects and clients of KeyBanc Capital Markets in addition to the market at large. Structured products include the arranging of securitization of lease; loan and license/subscription receivables; lease structures for equipment and single-tenant real estate; structured debt for projects and facilities; and leveraged leasing. Neason has more than 20 years of experience in domestic and international equipment finance, including a core focus in the transportation and energy industries. Potthoff joined Key Equipment Finance (then Leasetec Corporation) in 1991 and most recently oversaw vendor operations in North America, which is Key's largest vendor leasing unit.
Popular Leasing U.S.A. of St. Louis, a subsidiary of Banco Popular North America, has named Frederick M. Van Etten as president upon the retirement of Bruce Horton. The appointment was effective Aug. 1, 2006. Horton served PLUSA for a decade and contributed significantly to the company's growth of nearly $400M in lease receivables with 74 employees. He was instrumental in PLUSA's strategic re-alignment in order to pursue traditional small ticket, medical, commercial, and vendor driven leasing activities. Prior to joining PLUSA mid-year in 2005, Van Etten was the president and CEO of SilverMark Capital, the leasing division of Sterling Bank in Houston, for 3 years.
The Financial Accounting Standards Board and International Accounting Standards Board in London have agreed to undertake a joint project designed to overhaul FAS 13, the lease accounting rules in place since 1976. The decision to add a leasing project reflects the FASB's concern that the current accounting in this area does not clearly portray the resources and obligations arising from lease transactions.
Before making this decision, the FASB consulted with its constituents, including the FASB's Financial Account-ing Standards Advisory Council ('FASAC'), its User Advisory Council ('UAC'), and the SEC staff. Many of those constituents urged the FASB to undertake a project, expressing the view that current lease accounting standards fail to provide complete and transparent information. In fact, the SEC staff formally raised issues with, and recommended improvements to, this area as part of its June 2005 report to Congress on off-balance sheet arrangements as required by the Sarbanes-Oxley Act of 2002.
The proposed timetable for the project is as follows: This year, the FASB staff is conducting research on the scope and implications of the project; in 2007, the Board will begin deliberations; in 2008, a Preliminary Views document will be issued and comments will be solicited from interested parties; in 2009, a formal Exposure Draft will be issued for comment, with final guidance released that year as well.
FASB has stated that it wants to examine both lessee and lessor accounting, but it is concerned that the complex issues involved in lessor accounting not delay progress on the project. According to the Equipment Leasing Association, FASB Chairman Herz and at least one other member of the Board specifically mentioned that the issue of materiality for small ticket transactions would be taken into account as the Board deliberates, and that the Board will consider the cost-benefit of any new rules change. Both the FASB and IASB are in the process of assembling a working group of experts to assist the Board and staff as they work through and try to understand the issues involved. The Board has requested that the ELA be represented in this work group, and the Association has agreed to do so.
In a separate announcement, on July 13, the FASB issued a staff position that will require companies to recalculate their leveraged leases if there is a change or projected change in the timing of cash flows relating to income taxes generated by the leveraged lease. The FSP is being issued concurrent with an interpretation of FASB Statement No. 109, Accounting for Income Taxes. The guidance in this FSP shall be applied to fiscal years beginning after Dec. 15, 2006.
The law firm of
Main Street National Bank of Kingwood, TX, has named John Lee as senior vice president and general counsel. During his 35-year career in the equipment leasing industry, Lee has worked in private practice at
Key Equipment Finance of Superior, CO, has announced the appointment of Philip E. Neason and Bryan Potthoff to vice president positions within its Lease Advisory Services group, a small team focused on providing value-added products and services nationwide to prospects and clients of KeyBanc Capital Markets in addition to the market at large. Structured products include the arranging of securitization of lease; loan and license/subscription receivables; lease structures for equipment and single-tenant real estate; structured debt for projects and facilities; and leveraged leasing. Neason has more than 20 years of experience in domestic and international equipment finance, including a core focus in the transportation and energy industries. Potthoff joined Key Equipment Finance (then Leasetec Corporation) in 1991 and most recently oversaw vendor operations in North America, which is Key's largest vendor leasing unit.
Popular Leasing U.S.A. of St. Louis, a subsidiary of
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