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in early 2016 the financial accounting standards board or fasb issued a new standard to improve financial reporting about leases leasing is an important activity in business many companies and other organizations lease assets such as real estate airplanes trucks ships and construction and manufacturing equipment the new standard attempts to convey in a neutral and balanced way the true economic position that it enters into when it obtains access to capital in the form of a lease that is representing on balance sheet liabilities that a company incurs the problem with current gaap in terms of lease accounting is is relatively simple its the unrepresented obligation on the balance sheet representing the right to assets and the obligation to pay for that right in 2006 the fasb and the isb began a joint project to take a look at improvements to both u.s gaap and ifrs as it relates to leasing the goal of those projects was to both improve and converge the exis