Accounting for leases - the future

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. he current accounting standard IAS 17 Leases was criticised for not reflecting current practice. Why was there a need to look to change IAS 17?

  2. What is the fundamental principle which is driving the proposed leasing standard?

  3. On what basis would the lessee recognise a leasing asset in the statement of financial position?

  4. How would a lease be measured under the proposed standard in the lessee's financial records?

  5. How would a lease be subsequently measured under the proposed standard in the lessee's financial records?

  6. How would the lease term be determined under the proposed standard?

  7. What is the likely effect of the proposed accounting standard on the statement of financial position?

  8. How will leased assets be dealt with in the lessor's financial statements under the proposed standard?

  9. The Boards have discussed sale and lease back accounting in the proposed standard. What accounting principle is likely to be used?

  10. What is the Board's approach to transition from IAS 17 to the proposed new standard?