Lease Accounting Rule Changes
As part of their joint commitment to the “development of high quality, compatible accounting standards that could be used for both domestic and cross-border financial reporting”, the IASB and the FASB agreed to priorities and milestones for convergence of lease accounting rules by 2011. The project goal, “to insure that investors and other users of financial statements are provided useful, transparent, and complete information about leasing transactions in the financial statements”, reflects investor concerns that current accounting standards fail to clearly portray the resources and obligations from leases in a complete and transparent manner. These changes will increase transparency within the rules and prevent a loophole that allows for off-balance-sheet financing through leases.
Read more about this topic: Accounting For Leases In The United States
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