The article is headline Leasing accounting transaction, 2012
The author's name is Floyd Norris. In the article, he raises the important issue of rent accounting. The peculiarity lies in the fact that the balance sheet does not reflect the real financial condition of the lease. Thus, the assets of the enterprise are hidden.
The Financial Reporting Standards Board, which sets US rules, and the International Accounting Standards Board have come up with a solution that splits the problem in two.
The first problem is the majority of leases on the balance sheet as assets with debt compensation. The second is disagreement over the processing of the income statement.
To sum it up: when the rule is introduced, many corporate balance sheets will suddenly inflate, adding many assets and many debts. Companies will have to spend a lot of time convincing investors that they won't suddenly become much more risky and that the debt has always been there, even if it wasn't shown on the balance sheet before.
Aiza Abdulkhalimova FLOYD NORRIS’S article on ‘A Deal on Lease Accounting’, 2012 discusses the problem with leases is that for practical purposes they are often ways to own something without showing it as an asset and without showing the required payments as a liability. The solution the boards proposing slices the issue into two pieces. If the lease really amounts to ownership, as is true with most leases of planes or heavy equipment, then it would be treated as in the original proposal. So leases that are not like ownership would get the straight-line treatment that people wanted. The author concludes that when they do implement a new rule, many corporate balance sheets will suddenly balloon, adding a lot of assets and a lot of debt. Companies have to spend a lot of time reassuring investors that they are not suddenly a lot riskier, and that the debt was always there, even if it was not previously shown on the balance sheet.
According to ‘A deal on lease accounting’, 2012, Floyd Norris offers to see how the new approach of Financial Accounting Standards Board and International Accounting Standards Board will flies.
As the author says the main problem with leases is that for practical purposes they are often ways to own something without showing it as an asset and without showing the required payments as a liability. The solution the boards will propose slices the issue into two pieces. If the lease really amounts to ownership, as is true with most leases of planes or heavy equipment, then it would be treated as in the original proposal. So leases that are not like ownership will be shown in the balance sheet as they are supposed to be.
The author sums up that after implementing of the new rule companies will have to spend a lot of time reassuring investors that they are not suddenly a lot riskier because of the massive changes in their balance sheets.
Floud Norris is the author of the article "A Deal on Lease Accounting". In this article the author highlights the problem with leases in that for practical purposes it is often a way of owning something without showing the necessary payments as an asset. The problem with leases is that for practical purposes it is often a way of owning something without showing it as an asset and without showing the required payments as a liability. A big controversy has arisen over the recognition in the income statement. The author goes on to say that Today, the Financial Accounting Standards Board and the International Accounting Standards Board said they have reached agreement on a new approach to accounting for leases. Rather than simply accounting for lease payments each month as an expense, the original proposal called for a settlement that treated the transaction as a purchase and loan. Author of the article also maintains The solution the council is proposing splits the problem into two parts. If rent equals possession, it would be treated the same as in the original proposal. Author concludes that a lease that does not look like ownership will get the straightforward treatment that people wanted." When the new rule is introduced, the balance sheets of many companies will suddenly get bloated, adding a lot of assets and a lot of debts. Companies will have to spend a lot of time convincing investors that they have not suddenly become much riskier.
Mariyat Khanakhmedova. The author, FLOYD NORRIS, gives the information about Lease accounting as a one of those things that drive some analysts up a wall, and fixing it has long been on the list of things the accounting rule makers should do. as noted in the study, the problem with renting is that for practical purposes it is often a way to own something without showing it as an asset and without showing the necessary payments as a liability. as an example, airline balance sheets often show that they have few, if any, aircraft and relatively little debt. the author suggests a fairly optimal Solution, which the board will propose, divides the problem into two parts. If the lease really represents ownership, as it happens in most cases of aircraft or heavy equipment rentals, then it will be treated as in the original offer. the conclusion concludes that Companies will have to spend a lot of time trying to convince investors that they will not suddenly become much riskier, and that the debt has always been there, even if it was not previously displayed on the balance sheet.
According to ‘A deal on lease accounting’, 2012, Floyd Norris observes the way of how the new approach in a lease accounting affects companies.
The author draws attention to the fact that companies often find the way to own something without showing it in the balance sheet thus reducing their debts like Airline companies usually do with planes.
To prevent this kind of fraud in the balance sheet, The Board proposes to divide the leases depending on the percentage of the life or value of the lease asset and in that way to slice the leases into a finance lease and an operating lease.
In this case the author notes about the fact that there is no way of determining whether this lease is large enough to count it as a loan or small to put it in income statement. Another thing that author point out is that many corporate balance sheets will suddenly balloon, adding a lot of assets and a lot of debt. And it would be hard to prove investors that it's not a super risky incident and the debt was always there, even if it was not previously shown on the balance sheet.
The headline of article I have read is “A Deal on Lease Accounting” which written by Floyd Norris. The article touches upon issue of adaption of audit to the rapid changes of the world that we are facing.
One of the important problems that the author raises is lease accounting is one of those things that drive some analysts up a wall, and fixing it has long been on the list of things the accounting rule makers should do. Today the Financial Accounting Standards Board and the International Accounting Standards Board came to a single agreement on a new approach Author says that the problem with leases is that for practical purposes they are often ways to own something without showing it as an asset and without showing the required payments as a liability. Rather than just take the lease payments each month as the expense, the original proposal called for calculations that treated the transaction as a purchase and a loan. Were a lot of protests about this problem. The solution to the problem was cut into two components. After all protest was accept that leases that convey a relatively small percentage of the life or value of the leased asset should be recognized evenly over the lease term.
The author came to the conclusion that when they do implement a new rule, many corporate balance sheets will suddenly balloon, adding a lot of assets and a lot of debt. Companies will have to spend a lot of time reassuring investors that they are not suddenly a lot riskier, and that the debt was always there, even if it was not previously shown on the balance sheet.
Dayana Shikhgasanova
ОтветитьУдалитьThe article is headline Leasing accounting transaction, 2012
The author's name is Floyd Norris. In the article, he raises the important issue of rent accounting. The peculiarity lies in the fact that the balance sheet does not reflect the real financial condition of the lease. Thus, the assets of the enterprise are hidden.
The Financial Reporting Standards Board, which sets US rules, and the International Accounting Standards Board have come up with a solution that splits the problem in two.
The first problem is the majority of leases on the balance sheet as assets with debt compensation. The second is disagreement over the processing of the income statement.
To sum it up: when the rule is introduced, many corporate balance sheets will suddenly inflate, adding many assets and many debts. Companies will have to spend a lot of time convincing investors that they won't suddenly become much more risky and that the debt has always been there, even if it wasn't shown on the balance sheet before.
The article is headlined "A deal on Lease accounting"
УдалитьAiza Abdulkhalimova
ОтветитьУдалитьFLOYD NORRIS’S article on ‘A Deal on Lease Accounting’, 2012 discusses the problem with leases is that for practical purposes they are often ways to own something without showing it as an asset and without showing the required payments as a liability.
The solution the boards proposing slices the issue into two pieces. If the lease really amounts to ownership, as is true with most leases of planes or heavy equipment, then it would be treated as in the original proposal. So leases that are not like ownership would get the straight-line treatment that people wanted.
The author concludes that when they do implement a new rule, many corporate balance sheets will suddenly balloon, adding a lot of assets and a lot of debt. Companies have to spend a lot of time reassuring investors that they are not suddenly a lot riskier, and that the debt was always there, even if it was not previously shown on the balance sheet.
According to ‘A deal on lease accounting’, 2012, Floyd Norris offers to see how the new approach of Financial Accounting Standards Board and International Accounting Standards Board will flies.
ОтветитьУдалитьAs the author says the main problem with leases is that for practical purposes they are often ways to own something without showing it as an asset and without showing the required payments as a liability. The solution the boards will propose slices the issue into two pieces. If the lease really amounts to ownership, as is true with most leases of planes or heavy equipment, then it would be treated as in the original proposal. So leases that are not like ownership will be shown in the balance sheet as they are supposed to be.
The author sums up that after implementing of the new rule companies will have to spend a lot of time reassuring investors that they are not suddenly a lot riskier because of the massive changes in their balance sheets.
Floud Norris is the author of the article "A Deal on Lease Accounting". In this article the author highlights the problem with leases in that for practical purposes it is often a way of owning something without showing the necessary payments as an asset. The problem with leases is that for practical purposes it is often a way of owning something without showing it as an asset and without showing the required payments as a liability. A big controversy has arisen over the recognition in the income statement.
ОтветитьУдалитьThe author goes on to say that Today, the Financial Accounting Standards Board and the International Accounting Standards Board said they have reached agreement on a new approach to accounting for leases. Rather than simply accounting for lease payments each month as an expense, the original proposal called for a settlement that treated the transaction as a purchase and loan.
Author of the article also maintains The solution the council is proposing splits the problem into two parts. If rent equals possession, it would be treated the same as in the original proposal.
Author concludes that a lease that does not look like ownership will get the straightforward treatment that people wanted." When the new rule is introduced, the balance sheets of many companies will suddenly get bloated, adding a lot of assets and a lot of debts. Companies will have to spend a lot of time convincing investors that they have not suddenly become much riskier.
Mariyat Khanakhmedova.
ОтветитьУдалитьThe author, FLOYD NORRIS, gives the information about Lease accounting as a one of those things that drive some analysts up a wall, and fixing it has long been on the list of things the accounting rule makers should do.
as noted in the study, the problem with renting is that for practical purposes it is often a way to own something without showing it as an asset and without showing the necessary payments as a liability.
as an example, airline balance sheets often show that they have few, if any, aircraft and relatively little debt.
the author suggests a fairly optimal Solution, which the board will propose, divides the problem into two parts. If the lease really represents ownership, as it happens in most cases of aircraft or heavy equipment rentals, then it will be treated as in the original offer.
the conclusion concludes that Companies will have to spend a lot of time trying to convince investors that they will not suddenly become much riskier, and that the debt has always been there, even if it was not previously displayed on the balance sheet.
Medina Nurmagomedova
ОтветитьУдалитьAccording to ‘A deal on lease accounting’, 2012, Floyd Norris observes the way of how the new approach in a lease accounting affects companies.
The author draws attention to the fact that companies often find the way to own something without showing it in the balance sheet thus reducing their debts like Airline companies usually do with planes.
To prevent this kind of fraud in the balance sheet, The Board proposes to divide the leases depending on the percentage of the life or value of the lease asset and in that way to slice the leases into a finance lease and an operating lease.
In this case the author notes about the fact that there is no way of determining whether this lease is large enough to count it as a loan or small to put it in income statement. Another thing that author point out is that many corporate balance sheets will suddenly balloon, adding a lot of assets and a lot of debt. And it would be hard to prove investors that it's not a super risky incident and the debt was always there, even if it was not previously shown on the balance sheet.
The headline of article I have read is “A Deal on Lease Accounting” which written by Floyd Norris.
ОтветитьУдалитьThe article touches upon issue of adaption of audit to the rapid changes of the world that we are facing.
One of the important problems that the author raises is lease accounting is one of those things that drive some analysts up a wall, and fixing it has long been on the list of things the accounting rule makers should do. Today the Financial Accounting Standards Board and the International Accounting Standards Board came to a single agreement on a new approach
Author says that the problem with leases is that for practical purposes they are often ways to own something without showing it as an asset and without showing the required payments as a liability. Rather than just take the lease payments each month as the expense, the original proposal called for calculations that treated the transaction as a purchase and a loan. Were a lot of protests about this problem. The solution to the problem was cut into two components.
After all protest was accept that leases that convey a relatively small percentage of the life or value of the leased asset should be recognized evenly over the lease term.
The author came to the conclusion that
when they do implement a new rule, many corporate balance sheets will suddenly balloon, adding a lot of assets and a lot of debt. Companies will have to spend a lot of time reassuring investors that they are not suddenly a lot riskier, and that the debt was always there, even if it was not previously shown on the balance sheet.