New lease rules

 New rules on operating leases will “wreak financial reporting havoc”

The IASB is to abolish off-balance sheet recording of operating leases this week in a change the Times says will “wreak financial reporting havoc”. A lease will now have to be recognised as an asset on the balance sheet with its total cost over its term registered as an upfront liability. The paper’s Robert Lea says accountants, are warning of confusion over what aspects of rented items to include, such as bundled-in maintenance and service contracts on a rented property. Company finance departments are to be allowed three years in which to rewrite their accounts, he says, adding: “Forget more construction and manufacturing apprentices: we are going to need way more accountants.”

Source:   The Times (11/01/2016)