What's all the fuss about?
Article Abstract:
Investors, lenders and other users of financial instruments bemoan the inadequacy of current financial statements in accounting for financial instruments. They wonder why the balance sheet does not reflect these financial products despite the increasing sophistication and volume of these instruments. Global capital markets are demanding a unified and consistent set of accounting standards, and are requiring further disclosure. However, there are two roadblocks to these objectives, namely the distrust of current values and the possible consequences in terms of profit recognition, specifically for connected transactions. In response to such sentiments, standard setters should determine how they will go about shifting to the more appropriate current value based system. They should also ascertain if changes that are not related to all financial instruments are sufficient.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1998
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Don't do this to us, please
Article Abstract:
The uncertainty in the accounting environment has been having negative economic effects on the British leasing industry and its customers. In 1997, the International Accounting Standards Committee endorsed the revision of International Accounting Standard No 17, 'Leases.' The revised version advocates the 'qualitative risks and rewards' approach, defining a transaction where the lessee assumes substantially all the risks and rewards of ownership as a finance lease. The Accounting Standards Board is presently working on a new lease accounting document which is scheduled to be published in the middle of 1999. The ongoing discussions about fundamental lease accounting reform is harmful for lease companies heavily dependent on long-term contracting in particular and for leasing in general as compared to all other types of executory contracts.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1999
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