International lease-accounting reform and economic consequences: The views of U.K. users and preparers

Citation

Beattie V, Goodacre A & Smith SJ (2006) International lease-accounting reform and economic consequences: The views of U.K. users and preparers. International Journal of Accounting, 41 (1), pp. 75-103. https://doi.org/10.1016/j.intacc.2005.12.003

Abstract
In response to perceived difficulties with extant lease-accounting standards in operation worldwide, the G4+1 issued a discussion paper which proposes that all leases should be recognized on the balance sheet. Leasing is now on the active agenda of the IASB. A major difficulty faced by standard setters lies in overcoming the preparer/user lobbying imbalance and obtaining ex ante evidence on the likely impact of regulatory reform. This paper contributes to the ongoing international debate by conducting a questionnaire survey of UK users and preparers to assess their views on proposals for lease-accounting reform and on the potential economic consequences of their adoption. The results, based on 132 responses, indicate that both groups accept that there are deficiencies in the current rules, but they do not agree on the way forward and believe that the proposals would lead to significant economic consequences for key parties. The impact on respondents’ views of familiarity with the proposals, level of lease usage, and company size, is also examined.

Keywords
Lease accounting; Off-balance-sheet finance; Survey; Economic consequences; Lobbying

Journal
International Journal of Accounting: Volume 41, Issue 1