Lease accounting in the United States is still on track to change. The accounting standards boards in the United States and Europe — FASB in the US and the IASB in Europe — are moving forward with a plan to eliminate distinctions between operating and capital leases for book purposes. Lessees would be required to treat leased assets essentially as owned, and the obligation to rent as a liability, on their balance sheets in any cases where the lessee is expected to have more than an insignificant portion of the economic benefits embedded in a leased asset under proposed guidance issued in August 2010 and updated in May this year. Existing leases will not be grandfathered once the change takes place . . . . The IRS said in an internal legal memo that two companies that cooperated on development of a product and jointly marketed it under a trademark held jointly and with documents that showed both company logos created a partnership and should have filed a US partnership return. They said in a side agreement that they did not intend to create a partnership. However, they split the income from product sales by charging costs against the revenue and then dividing up the revenue in one ratio until $X in operating profits was reached, and then in a different ratio. The IRS said they could not elect out of partnership treatment by filing an election under section 761 of the US tax code because the arrangement was not a mere investment partnership with a passive role and they were not joint owners of a property in a position to calculate their incomes from use of the property separately. The memo is Chief Counsel Advice 201323015. The IRS made it public in June.