“The Finance and Leasing Association has an associate who serves on one of the IASB’s working parties on the leasing project. With that associate, the accountancy panel of the FLA has drawn up a document we believe the IASB is considering.
“However, the board has a very broad market to understand. At the one end, you have the small-ticket market – in terms of equipment and motor vehicles – and at the other end, you have very large big-ticket structured finance deals for property, ships or planes.”
Lease accounting causes headaches the world over. Last July, the IASB and its counterpart in the US, the Financial Accounting Standards Board, formally undertook a project to address the current accounting standards for leases.
The joint project intends to provide clearer information about leasing transactions in financial statements.
Lunt says: “I’ve been a member of the FLA’s accountancy panel for about two or three years. The FLA is working hard to ensure that representations are made to the IASB, around ensuring both the lessee and the leaser accounting are fair and reflective of the economics behind leasing products.”
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