RegulationAccounting StandardsStandards setters target lease accounting

Standards setters target lease accounting

IASB and FASB join forces to reform 'smoke and mirrors' lease accounting

The International Accounting
Standards Board
and its US equivalent, the Financial Accounting
Standards Board, have joined forces to introduce radical reforms to lease
accounting.

The changes the two bodies are working towards could see airlines, retailers,
restaurant chains and other users of commercial leases bring lease assets onto
their balance sheets for the first time, the
FT reports.

‘You’re talking about about a dramatic impact on the balance sheets of
companies; almost every balance sheet in the US will change. Debt-equity ratios
will completely change,’ Ed Nusbaum, chief executive of accountants Grant
Thornton said.

Credit Suisse
estimates that $396bn (£202.9bn) in off-balance sheet liabilities could be
affected across a range of S&P 500 companies.

Further reading:

Countries to get more time on global standards

IFRS rules: views from the top

IASB makes first move on redesigning accounts

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