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Lease Project Possible Stalemate
The latest FASB/IASB Lease Accounting Project meetings on Feb. 28 and 29 had as objectives to change the lessee cost pattern to better reflect the economics (straight-line) and to see if that decision would mean changes to lessor accounting methods that had already been decided. The reason for the continued work on the lessee cost pattern is that most comment letters supported a straight-line cost pattern for what we call operating leases under current GAAP. The reason they would re-look at lessor accounting is the concern of many Board members that they consider the possible need for symmetry.
The Boards could not agree on a lessee accounting method, so they never got to the lessor/lessee symmetry issues. The lessee issue under consideration was the front-loaded cost pattern of the right of use (“ROU”) method for lessees whereby the ROU asset is amortized straight-line and interest is imputed versus the ROU liability amortizing using “effective interest method” amortization. The comment letters of virtually all preparers (lessees) and many users (lenders, debt analysts and equity analysts) received by the Boards said that there are two types of leases ' leases that transfer ownership (aka capital leases per current GAAP) and leases that merely transfer a temporary right of use (aka operating leases per current GAAP). The comments said further that the P&L cost pattern should be different with only former capital leases having a front-loaded cost pattern, while the former operating leases should have a level cost pattern. In other words, should there be two types of leases and lessee accounting methods with the ROU or former operating leases having a straight-line cost pattern? The FASB agrees, while the IASB does not. The IASB thinks that all leases should be accounted for the same, citing one of the Project's initial objectives ' to eliminate different accounting for similar leases that is an issue under FAS 13 with its bright-line PV test.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Supreme Court Rules Rejection of Trademark License Does Not Rescind Rights of Licensee
Mission Product Holdings, Inc. v. Tempnology, LLC The question is whether a debtor's rejection of its agreement granting a license "terminates rights of the licensee that would survive the licensor's breach under applicable nonbankruptcy law."