KPMG recently commented on the IASB Exposure Draft and proposed FASB ASU, Leases. If finalized as exposed, these proposals will significantly change how lessees and lessors account for and report leasing arrangements in their financial statements. We continue to support the Boards’ objective to develop a single, less complex approach to lease accounting and the broad principle that assets and liabilities that arise under leases be recognized on a lessee’s balance sheet. However, we believe bringing leases on-balance sheet should not be seen as an end in itself, to be pursued at any cost, and that the Boards should not finalize a standard based on the current proposals. We do not consider the current proposals to be an improvement over current GAAP because we believe they will not satisfy financial statement users, will not justify the costs of implementation and ongoing application, and lack conceptual merit. KPMG’s comment letter identifies attributes that we believe are essential to an improved lease accounting model. We also suggest alternative ways the Boards could move forward with the project, including limited-scope improvements to current GAAP and enhanced disclosure requirements if the Boards are unable to develop an alternative lease accounting model that could form the basis of an improved lease accounting standard.