We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Accounting For Leases And New Proposed Models - Essay Example

Comments (0) Cite this document
Summary to essay on topic "Accounting For Leases And New Proposed Models"
Lease is the periodic payment, usually paid per month, by the lessor to the lessee for use of property rented. There have been many opinions, counter opinions regarding better ways to record these lease contracts…
Download full paper
Polish This Essay
Accounting For Leases And New Proposed Models
Read TextPreview

Extract of essay "Accounting For Leases And New Proposed Models"

Download file "Accounting For Leases And New Proposed Models" to see previous pages... The International Accounting Standards Board calls for a new lease accounting principle that relates to assets and liabilities. This write up proposes criteria to be set for deciding between two interpretations of whether the lease increases or decreases both assets and / or liabilities. SFAS no. 13,
Let us write or edit the essay on your topic "Accounting For Leases And New Proposed Models" with a personal 20% discount.. Try it now
which was issued by FASB, was at that time, 2001, showing improvement on the setting of accounting standards for leases. Many write ups on leases followed suit such as 9 FASB amendments, 12 FASB technical bulletins, EITF consensus, 6 FASB interpretations and others. The FASB is continually working to come up with an adjustment to the Statement of Financial Accounting Standards no. 13 (lease) because it has failed to address many questions by many sectors of the accounting, school, business and other companies on the accounting procedures and interpretation of leases.
SFAS no 13 states that an asset can be considered a capital lease, where the value of the leased property is included in the balance sheet of the lessee, If the four conditions listed a are met: a) The lease conveys ownership to the lessee at the end of the lease term. b) The lessee has an option to purchase the asset at a bargain price at the end of the lease term. c) The lease term covers 75% or more of the economic life of the asset. d) The present value of the rental payments when using the lessee’s incremental borrowing rate is ninety percent or more of the fair market value of the asset.
TWO ALTERNATIVE CONCEPTS OF LEASE ACCOUNTING

One of the main points of SFAS 13 is that all lease contracts generate obligations that should be presented in the balance sheet, contrary to what the Financial Accounting Standards Board believes. In fact, SFAS no. 13 states that "a lease that transfers substantially the entire benefits and risks incident to the ownership of property should be accounted for as the acquisition of an asset and the incurrence of an obligation by the lessee and as a sale or financing by the lessor. All other leases should be accounted for as operating leases. (FASB 1976, para. 60)" FASB differs this by saying that not all lease contracts create both a new asset and a new liability.

The FASB and G4+1 group have been implementing the FASB standard on lease recording. Companies in Canada, Australia, United Kingdom and New Zealand have also been following the FASB standards.

THE CONCEPTUAL FRAMEWORK AND ACCOUNTING FOR LEASES

When assessing the generally accepted accounting principles states that accounting information that should be included in the financial statements are those that are submitted on time to the decision makers. These financial statements must also be relevant to the decision making process. Further, the financial statement items should stated in such a way as to permit comparability between two accounting periods or two or more financial entity who are subsidiaries, branches or competitors.

Therefore, when rights and obligations are recorded in a lease contract, intangible assets are created. An airline company comes into "existence" when it buys an airplane. According to monsoon,

There is a possibility that lessees may record the lease asset in the balance sheet will be boundless because intangible assets cannot be easily estimated. When a bank ...Download file "Accounting For Leases And New Proposed Models" to see next pagesRead More
Cite this document "Accounting For Leases And New Proposed Models"
  • APA
  • MLA
  • CHICAGO
(“Accounting For Leases And New Proposed Models Essay”, n.d.)
Accounting For Leases And New Proposed Models Essay. Retrieved from https://studentshare.org/miscellaneous/1511719-accounting-for-leases-and-new-proposed-models
(Accounting For Leases And New Proposed Models Essay)
Accounting For Leases And New Proposed Models Essay. https://studentshare.org/miscellaneous/1511719-accounting-for-leases-and-new-proposed-models.
“Accounting For Leases And New Proposed Models Essay”, n.d. https://studentshare.org/miscellaneous/1511719-accounting-for-leases-and-new-proposed-models.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC "Accounting For Leases And New Proposed Models"
Leases. Principles for Financial Reporting, ASB
Off-balance sheet arrangement have long been the main concern of all accounting regulators and the economic consequences related to these items have prompted these regulators around the globe to think of developing standards that increases transparency in the financial reporting.
5 Pages(1250 words)Essay
Timmers Proposed Business Models
Introduction Internet business models is one of the buzzwords in today's virtual community marketplace. There are a number of different frameworks that businesses may use to launch a business on the Internet. Paul Timmers wrote about electronic commerce when the Internet was still relatively new and uncharted territory, which made him a visionary.
25 Pages(6250 words)Essay
The Information Asymmetry, Corporate Failures in Contemporary Issue in Accounting
The practices of accountants and auditors must be consistent and compliant with the standards and regulations issued by governing authorities and regulators such as the GAAP or the Generally Accepted Accounting Principles and many others. Auditor serves the central role in the accounting system; internal auditor can serve the purpose of ensuring that internal control systems are good and also enhance corporate governance.
9 Pages(2250 words)Essay
Management Accounting
"The process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of financial information used by management to plan, evaluate, and control within an organization and to assure appropriate use of and accountability for its resources.
8 Pages(2000 words)Essay
Leases (Accounting)
ounting model has been criticized by many users of financial statements because of its complexity, as assets and liabilities are not recognized, and similar transactions are reported in different manner. Assets and liabilities are understated in the operating lease accounting
6 Pages(1500 words)Essay
Financial Accounting (BUSINESS COMBINATIONS/INTANGIBLE ASSETS/LEASES)
Goodwill does not meet the definition of intangible asset according to AASB 138, since it is not identifiable as it could not be sold or transferred. Goodwill represents the
4 Pages(1000 words)Essay
How to fix financial reporting
Subprime mortgage can be explained as an inferior class residential mortgage that is secondary to prime mortgage. The economists have warned that it is necessary to reform and regulate the financial markets around the world from
11 Pages(2750 words)Essay
Leases
However, the main objective of the paper is to explain what happens to the property, if happened that the person who leased the office died during the lease period. The lease of a real property is terminable at the inclinations
1 Pages(250 words)Essay
Finance accounting
existence of accounting records is to minimize or reduce the effect of principal-agent problem; its impact is reduced by measuring and close monitoring of the performance and reporting the results to parties concerned. Financial accounting is a discipline which has evolved over
12 Pages(3000 words)Essay
Leases
Under the finance lease, all the risks and rewards that come with ownership are transferable to the lessee. To the lessee, it forms both an asset and liability while to the lessor it is a receivable. On the other hand, operating leases form an expense to the
5 Pages(1250 words)Essay
Let us find you another Essay on topic Accounting For Leases And New Proposed Models for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us