Leasing liability problems likely to grow
Survey finds UK business needs to make extra liability provisions of billions.
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.