ABSTRACT
A former director of research of the AICPA who was an author of two AICPA research studies (Moonitz, 1961, and Sprouse and Moonitz, 1962) contended that all active noncancelable leases should be reported as providing assets: “the asset ([is] the right to occupy the premises) . . .” ([Moonitz and Jordan, 1963, 325]) and causing liabilities if some rent is yet to be paid. (Active leases are those in which possession of the leased property has been transferred to the lessee.) Two AICPA research studies themselves contended the same thing:
[if] the right to use the asset has not been purchased for its full useful life . . . it is not incorrect to record . . . the smaller asset being purchased for a smaller price . . . The fact that the right expires before the asset becomes useless to anyone in the economic sense can hardly make a
significant difference; it is useless to the lessee at the expiration of the lease.
