Leasing liability problems likely to grow

British companies could soon find they have to account for billions of pounds worth of liabilities from leases on properties.

Link: Leasing standard set to deliver a surprise blow

Current accounting standard FRS12 says companies must set aside provisions for contingent liabilities such as surplus property. At present, companies only have to make a footnote to their balance sheets to explain their FRS12 situation. But they may soon be forced to make put the numbers directly onto the balance sheet, according consultancy firm FraserCRE.

A study by the firm found that 21 medium to large companies had an average liability under FRS12 of £22.6m, which could mean British companies in future having to make provisions of tens of billions of pounds, according to the Financial Times.

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