Except for short-term operating leases for which the lessee elects not to report a lease asset and liability, FASB ASC 842 requires lessees to report an asset and liability for all operating lessees. Prior GAAP only required lessees to report an asset and liability for capital leases.
Team 1: Argue in favor of reporting an asset and liability for operating leases. Your argument should take into consideration the conceptual framework definitions for assets and liabilities, as well as the FASB’s rationale for requiring the change in the reporting requirements for operating leases.
Team 2: Argue against changing the reporting requirements for operating leases. Your argument should take into consideration the matching principle and the FABS’s rational for lease capitalization.