Lease accounting changes 'little known'

BUSINESSES around the world exhibit low awareness of impending lease accounting changes and even lower support, a new survey has found.

More than half (54%) are not aware of the impending change that will drag all but short-term leases onto the balance sheet, according to a Grant Thornton survey of 2,800 businesses globally.

Of those that do anticipate the change, 46% were in favour and 15% believed it would increase transparency, while 33% thought it would raise costs and complexity.

Tarun Mistry, head of leasing and consumer finance, welcomed the review of lease accounting, but urged global standard setter the IASB to "be patient and get things right".

"We desire a new standard that is practical for business – avoiding undue complexity and excessive estimation uncertainty. Both lessees and lessors need transparent, comprehensible information both on leasing obligations and also on the related revenue and costs," he continued.

Transport sector members will be among those most affected by the revision, yet 53% were unaware of the potential changes.

The IASB and US standard setter the FASB plan to re-expose their latest proposals early next year.