IASBs nye leasingstandard: Er den bedre end IAS 17?

Katja Hoffmann Larsen

Student thesis: Master thesis


Today leasing is an important financing source to many corporations, because it's an easy way to obtain assets without being imposed to the risks associated with ownership. In that regard the accounting standard IAS 17s distinction between financial and operational leases has been highly criticized, mainly because not all material leases are represented on the balance sheet. Secondly the distinction has been criticized for its complexity, structuring opportunities and the risk of inconsistent classifications, which reduces comparability for users. Thirdly IAS 17 has been criticized for being conceptually flawed, because operational leases meet the definitions of assets and liabilities plus recognition criteria, but are not recognized on the balance sheet. The International Accounting Standards Board (IASB) is working on a new leases standard. The newest proposal eliminates the distinction between operational and financial leases, but small and short-term leases are not required to be presented on the balance sheet. The same applies to variable lease payments that do not depend on a index/rate and are not in-substance fixed payments. Furthermore the newest proposal simplifies the definition of leases. Through an analysis of conducted interviews this thesis has examined the extent of which the newest proposal counters the criticism of IAS 17. The analysis shows that the majority of all leases will be recognized on the balance sheets. The newest proposal does however contain some distinctions. To a limited extent these may lead to structuring opportunities, complexity and a risk of inconsistent classifications. At the same time there is a risk of small leases being materiel which in turn can hinder the countering of several aspects of the criticism. However it is expected that in most cases small leases will be immaterial. Conclusively the newest proposal overall succeeds in countering the criticism raised against IAS 17.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2015
Number of pages153