"ACCOUNTANCY4The proposal is stated to be of Federal Financial Accounting Standards (SFFAS), Leases: AnAmendment of SFFAS 5, Accounting for Liabilities of the Federal Government, and SFFAS6, Accounting for Property, Plant, and Equipment. This has been designed to help ingathering information that is relevant and which is meaningful for the users of the financialstatements of the federal financial agencies.This proposal would also contain the set of various accounting standards pertaining to leasefor the purposes of recognising the activities associated with the lease accounting in the entityof reporting that is preparing its general purposes financial statements as well as giving theappropriate disclosures.Under this new proposal, the leases of these federal agencies would be reported as the leaseliability and the leased asset would be reported as at the beginning of the lease till the timethe lease of the intra-government so till the time it has been determined whether it is a shortterm lease. The federal lessor will report on the recognition of the lease which is receivablesand the deferred revenue but would leave out whether it is an intra-governmental lease of ashort term lease.The intra governmental lease would be defined as the contract or an agreement that willconvey the tight to use an asset for the period in exchange for the amount that takes placewithin the consolidated entity or between two or more of consolidated entities as have beendefined under the SFFAS 47 which relates with reporting entity. The proposal furthercontains thee recognition, measurement and the disclosure requirements for the lease of theintra government.The board seeks to the providing of all the relevant and the useful information which isrelated with the users of the federal agencies financial statements. The board has further taken ACCOUNTANCY5into account the various costs that are somewhat associated with the proposal of lease. Theseare the costing considerations that are related with the proposed accounting for the leases thatare short term in nature and that are related tothe intra governmental agencies.The main aims of this update or the proposal are the following:? Development of an approach that would make sure that all the assets along with theliabilities that arise under the contacts of lease have been recognised in the statementof the financial position and that all the related costs have been recognised in thestatement of net cost.? Ensure the revision of the much needed definitions of the current lease and theguidance on the recognition of the SFFAS5 and SFFAS 6 which involves theconsideration of the various advantages and the disadvantages when it comes toapplying the FASB or IASB standard of lease in the federal environment.? Ensure that these standards have been developed for the purposes of addressing thevarious transactions connected with lease or the activities that are being used in thefederal community.? For the consideration of the differences that exists between the accounting for lease andthe statement of budgets for the leased purchases and the leases of the capital assets ashave been specified in the Office of the Management and Budget as per circular A-11.When it comes to the preparation of the financial statements using the new GAAP leaserequirements or in order to be in line with the current economic scenario, the senior most ofeach of the company is undertaking the strategies for the purposes of major renovations andupdations. There has been an existing corporate real estate function that would haveoriginally supported the various different structures of operations when compared with whatexactly exists today. This could even be motivated by the fact of the financing or the taxconsiderations that are somewhat no longer applicable. These are the changes that may go on ACCOUNTANCY6to provide the catalyst for the change in these of the operations that goes in hand with themajor technical requirements of the accounting and that would go on to include thereconsideration of the various different strategies and the potential engagement in thetransactions of the real estate. The changes have been issued by the way of transformingaccounting for vapours leases. While there are many of the boards that work together on thatproject and were somewhat previously aligned, they had reached at the conclusion in many ofthe certain areas. This is mainly related with the treatment of the income statement of manyof the leases. This change or the diversity would result in the issues for the companies whenthey would deal with the various different models in the various different jurisdictions. Underthe new model, the rights of the lessee and the obligations under all of the leases that are longterm in nature would be reported in the balance sheet. The income statement would beclassified on the basis of the classification of the lease and would be either an operating or afinance lease. This will be differentiated using the regulations that are very much same as theclassification of the capital leases. The effective date of the transition of the year of 2019.When this new pronouncement is being adopted, then adjustments will have to be made in thefinancial statements of the previous periods. For the public companies, that would mean thatthe financial statements for 2017 and 2018 would be required to be re-casted for the purposesof reflecting the impact of the new standard.The following is an overview of the new standard on lease:? The basic and the main change is in the accounting for lessee. There are many of thepre-existing leases that shall not be carried forward. The lessor accounting would bethe same even under the new accounting standard when compared with the accountingof today.? All of the assets that have been leased under the operating lease leaving out the leasesthat are short term in nature or that are for less than 12 months as at the beginning of "