International Financial Reporting Standards
In the over 100 countries that govern accounting using International Financial Reporting Standards, the controlling standard is IAS 17, "Leases". While similar in many respects to FAS 13, IAS 17 avoids the "bright line" tests (specifying an exact percentage as a limit) on the lease term and present value of the rents. Instead, IAS 17 has the following five tests. If any of these tests are met, the lease is considered a finance lease:
- ownership of the asset is transferred to the lessee at the end of the lease term;
- the lease contains a bargain purchase option to buy the equipment at less than fair market value;
- the lease term is for the major part of the economic life of the asset even if title is not transferred;
- at the inception of the lease the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset.
- the leased assets are of a specialised nature such that only the lessee can use them without major modifications being made.
Read more about this topic: Finance Lease
Famous quotes containing the words financial, reporting and/or standards:
“A theory of the middle class: that it is not to be determined by its financial situation but rather by its relation to government. That is, one could shade down from an actual ruling or governing class to a class hopelessly out of relation to government, thinking of gov’t as beyond its control, of itself as wholly controlled by gov’t. Somewhere in between and in gradations is the group that has the sense that gov’t exists for it, and shapes its consciousness accordingly.”
—Lionel Trilling (1905–1975)
“I have been reporting club meetings for four years and I am tired of hearing reviews of the books I was brought up on. I am tired of amateur performances at occasions announced to be for purposes either of enjoyment or improvement. I am tired of suffering under the pretense of acquiring culture. I am tired of hearing the word “culture” used so wantonly. I am tired of essays that let no guilty author escape quotation.”
—Josephine Woodward, U.S. author. As quoted in Everyone Was Brave, ch. 3, by William L. O’Neill (1969)
“There are ... two minimum conditions necessary and sufficient for the existence of a legal system. On the one hand those rules of behavior which are valid according to the system’s ultimate criteria of validity must be generally obeyed, and on the other hand, its rules of recognition specifying the criteria of legal validity and its rules of change and adjudication must be effectively accepted as common public standards of official behavior by its officials.”
—H.L.A. (Herbert Lionel Adolphus)