On March 30, 2007, the Accounting Standards Board of Japan (ASBJ) issued ASBJ Standard No. 13, Leases.
Previously, accounting standards for leases, set forth by the Business Accounting Deliberation Council early 1990's, required entities to distinguish finance leases and operating leases, but allowed them not to capitalize finance leases provided that pro-forma information is disclosed in the notes.
The new Standard requires that all financial leases should be capitalized; i.e., leased assets and liabilities should be displayed on the face of the balance sheet.
Many accountants recognize that the new Standard is a major step forward to more transparent financial reporting. The economic consequence of accounting standards for leases have been considered significant especially for lease industry. Reportedly, there were a lot of political activities until the new standard was finalized.