A Study On Lease Accounting Standards

Lease accounting standards is accounting norms for the specific business and the special profession. Lease is an important way for raising money and managing assets. However, there are many defects in the current lease accounting standards. On the one hand, the rights and obligations produced in operating leases are not reflected in the tenant’s balance sheet, which makes operating leases an off-balance-sheet financing. On the other hand, the current guidelines for the classification of the operating lease and finance lease rely too much on distinct boundaries and subjective judgment, which leads to different accounting treatment of the similar lease transactions and reduces the comparability of financial statements.In2010, the Financial Accounting Standards Board (FASB)and the International Accounting Standards Board (IASB) issued the exposure draft Leases, which proposed to establish a unified set of lease accounting treatment in an effort to improve financial transparency and comparability across world markets. One component of this plan, centered on reform of current lease accounting standards, would eliminate the distinction between capital and operating leases and require almost all leases to be recognized as an asset and liability on the balance sheet. This represents a significant departure from the current lease accounting standards, which only requires the companies to disclose limited information about future operating lease requirements in the footnotes of financial statements.This paper includes five parts:the introduction, the content of the exposure draft Leases and its difference with the current international financial reporting standards, its influence and social evaluation, strategies to respond to the new change of lease accounting standards and the improvement suggestions and conclusions.In chapter1, the article explains the background and the significance of this study, literature review at home and abroad, the innovation and deficiency of this paper and so on.In chapter2, the article states the content of the exposure draft Leases and its difference with the current international financial reporting standards.In chapter3, the article explains the influence and social evaluation of the new change lease accounting standards. It mainly analyzes the influence on financial management decision of tenant companies, the effects of leasing industry and influence on leasing business supervision. It mainly analyzes the enterprise, leasing industry association, experts to draft evaluation and their attitude to lease accounting standards revision.In chapter4, the article explains strategies to respond to the new change of lease accounting standards and the improvement suggestions of the exposure draft leases. It analyzes the coping strategies that the enterprise and the government should take in order to reduce the negative influence of lease accounting standards revision.Chapter5gives us the conclusions.