Open AccessThe Joint FASB/IASB Lease Project: Discussion And Industry Implications
Author(s) -
John Kostolansky,
Brian B. Stanko
Publication year - 2011
Publication title -
journal of business and economics research
Language(s) - English
Resource type - Journals
eISSN - 2157-8893
pISSN - 1542-4448
DOI - 10.19030/jber.v9i9.5633
Subject(s) - lease , accounting , comparability , balance sheet , economics , transparency (behavior) , business , pro forma , finance , law , political science , mathematics , combinatorics
Over several decades, the Financial Accounting Standards Board and International Accounting Standards Board have enacted numerous changes to the controversial lease accounting rules. As currently prescribed, operating leases are treated as rental arrangements whereby the lessee does not record a liability - a situation generally referred to as off-balance sheet financing. In an attempt to increase transparency and comparability, the FASB and IASB will soon require all leases to be capitalized. This paper quantifies the impact of the new leasing standard on the financial statements and ratios of the firms and industries represented in the S&P 100 under a variety of discount rates.