Transcript Slide 1

The Future of IFRS Lease Accounting and its Impact
on the Industry:
The Perspective of the Aviation Industry
Jeffrey Wool
Secretary, Aviation Working Group
Leaseurope One-Day Business Forum
5 November 2007, Brussels
Overview Presentation - Topics
• A.
Aviation Working Group (AWG) - Purpose / Topics / Method
• B.
AWG - Members
• C.
AWG – Work on Lease Accounting
• D.
Introduction of Bill Solomon
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A. AWG – Purpose / Topics / Method
• Established - in 1994 by Airbus and Boeing, and formalised as nonprofit entity in 2001
• Purpose - To contribute to the development and acceptance of
policies, laws, regulations and rules that (i) facilitate advanced
international aviation financing and leasing or (ii) address
inefficiencies in aviation financing or leasing or that constrain these
transactions
• Topics Accounting, commercial and insolvency law, bank
regulation, aviation regulation, documentary standardisation,
insurance and liability, and environment
• Method (I) analytic work by sub-groups of AWG members, (II)
formulating industry positions, and (III) working with relevant bodies
to advance such positions. Consulting with airline and other groups,
as needed
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B. AWG - Members
Airbus
DVB Bank
Boeing
Embraer
Aercap
GECAS
Aircastle
General Electric
ATR
ILFC
Aviation Capital Group
JPMorgan
AWAS
BNP Paribas
BOC Aviation
Bombardier Aerospace
Calyon AirFinance
Citibank
KfW
Morgan Stanley
RBS Aerospace
Rolls-Royce
SAFRAN
UTC, Pratt & Whitney
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C. AWG – Work on Lease Accounting
• AWG created a international accounting issues sub-group in 2003
• Initial topic: revised Fin 46 interpretation (US 2003) and AgG 15
(Canada 2004) addressing ‘variable interest entities’, a concept
which intersected with special purpose entities and tax structures
common in aircraft financing
• Began tracking the discussion on potential lease accounting reform
(including with a possible link to fair value accounting) in 2005
• Agreed to make lease accounting a major topic in late 2006.
Activated the standing sub-group. Will support the role of Ho Soh
Khim, BOC Aviation) on the international working group, among
other things.
• Intends to produce a basic position paper over the next few months,
which would form the basis of our work going-forward
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C. Introduction – Bill Solomon
• Senior Manager – Technical Accounting, Boeing Capital Corporation
• Has – together with colleagues with ILFC and Ms. Ho – been in the
vanguard of AWG’s initial assessments of the lease accounting
project
• His talk is a Boeing-only presentation, as AWG has yet to agree on
public positions (and the empirical data on which they are based)
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