Extra Credit Assignment In the news recently, there has been a lot of discussion between the Financial Accounting Standards Board(FASB) and the International Accounting Standards Board(IASB) on finding an agreement to bring together US GAAP and IFRS on the topic of lease accounting. As we learned in class, one of the main differences between US GAAP and IFRS is the recognition of the expense pertaining to the lease. This is still one of the major sticking points in the discussions because it can affect the balance sheet so much. The main reason why the two parties are coming together to see if they can reach an agreement on this topic is to be able to create greater transparency for lease accounting worldwide to help investors globally. As we have studied so far this semester, US GAAP is very detail oriented when it comes to classifications which can make for a much more complicated situation, but does more accurately represent what is actually going on. IFRS is a little more judgment based which allows for companies to account for similar stuff in different ways. This is why it is understandable that coming together to a compromise is so difficult for these two parties. The members of the FASB want to continue with the approach that leases should be classified based on asset type where as the majority of the members of the IASB want to do away with classification of leases and treat all leases like a financed acquisition of an asset. It is hard to say which side will budge on the issue, but according to the article both sides acknowledge that there should be an asset and a liability on the balance sheet which is a big step in the right direction. Another issue they two sides have been discussing is the concept of when the lessor should recognize profit. The FASB wants to lessor to not be able to recognize profit until it gives control of the leased asset to the