Discussion of Ias 17 Leases
Assignment: Discussion of IAS 17 Leases
Student ID: 500284151
Module Organizer: Colin Bradley
Words Count: 1964 words
Date of Submission: 17th April, 2012
Discussion of IAS 17 Leases
Accounting for leasing is always being a hot topic. The standard setters of IAS 17 encountered much controversy when they tried to stop charging all lease payments to the income statement. In this essay, firstly, I will point out the key features of the current IAS 17 with its effect on General Electric Company for illustrative example. Then I will analyst the development of IAS 17 and its underling rationale. Finally, the criticisms of the standard will mainly be …show more content…
In current IAS 17, the leased items that substantially transferred the risks and reward to the lessee should be reported in the financial statements. The standard requires finance leases to be capitalized. The asset and liability should be brought onto the statement of financial position.
Criticisms of IAS 17
Unfortunately, there are strong criticisms raised in relation to the existing IAS 17S by securities regulators, professional accountants and other interested parties.
The main criticisms focus on the failure of the existing accounting model to meet the needs of financial analysis for users of financial statement. Commonly, investors and other users of financial statements believe operating leases produce assets and liabilities so they routinely adjust the recognized amounts to recognize the assets and liabilities so as to