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Economic consequences of discussed changes in lease accounting : a content based analysis of due process comment letters

Title data

Fehr, Jane ; Fülbier, Rolf Uwe:
Economic consequences of discussed changes in lease accounting : a content based analysis of due process comment letters.
2010
Event: European Accounting Association (EAA): 33th Annual Congress , 19.-21. Mai 2010 , Istanbul, Turkey.
(Conference item: Conference , Paper )

Official URL: Volltext

Abstract in another language

In response to perceived difficulties with existing lease
accounting standards in force worldwide, IASB and FASB issued a discussion paper which basically proposes that all lease contracts should be recognized on balance sheet. Standard setters have to overcome the imbalance of preparers and users lobbying and obtain ex ante evidence on the potential economic consequences of the lease accounting reform. This paper reports the results of a content analysis of comment letters submitted to the IASB and FASB in response to the discussion paper “Leases–Preliminary Views” (March 2009). Based on 300 responses, our findings indicate that respondents across all identified interest groups (academics, financial institutions, investors, lessee companies, lessor companies, standard setting bodies, and public accountants) anticipate significant economic consequences. Apart from the general anticipation that the administrative burden for lessees will increase, there is a clear expectation by all interest groups that the proposal would impact on key financial ratios and reported gearing. This is considered likely to lead to renegotiation of debt covenants, problems in obtaining new ways of financing, a reduction in ratings for some companies, and adversely affected company evaluations. Moreover, all interest groups anticipate that lease terms would become shorter to minimize balance sheet obligations, and some believe that the proposals would make lease financing less attractive.

Further data

Item Type: Conference item (Paper)
Refereed: Yes
Keywords: lease accounting; due process; economic consequences; IASB; FASB; content analysis
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Chair Business Administration X
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Chair Business Administration X > Chair Business Administration X - Univ.-Prof. Dr. Rolf Uwe Fülbier
Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences > 330 Economics
Date Deposited: 08 Jan 2015 13:14
Last Modified: 13 Apr 2015 09:45
URI: https://eref.uni-bayreuth.de/id/eprint/5414