Abstract
Non Bank Financial Institutions (NBFIs) have become prominent alongside with banking and finance sector. The major business of most NBFIs in Sri Lanka is leasing. Lease accounting is a form-driven standard. The Institute of Chartered Accountants of Sri Lanka (ICASL) introduced the revised accounting standard LKAS 17: Leases with effective from January 1, 2012. This research investigated the present state of accounting for lease in Sri Lanka as per the revised standard. An analytical review was done as per the standard and compliance with the stipulated disclosure requirements. All the Non Banking Financial Institutions which engage in leasing business and listed in the Colombo Stock Exchange were considered in this research. The methodology follows the content analysis which is consistent with Nasreen & Jahan (2007). The findings of this research indicate that the degree of correspondence between the standard as per LKAS: 17 and actual reporting by the leasing companies in Sri Lanka is considerably at a satisfactory level.DOI: http://dx.doi.org/10.4038/kjm.v2i1.6544 Kelaniya Journal of Management Vol.2(1) 2013:58-91
Highlights
Non Bank Financial Institutions (NIFIs) play a significant role in meeting the diverse financial needs of various sectors of the economy and contribute to the economic development of the country as well as deepening of the country’s financial system
The findings of this research indicate that the degree of correspondence between the standard as per LKAS: 17 and actual reporting by the leasing companies in Sri Lanka is at a satisfactory level
This research consists with all the Non Bank Financial Institutions (NBFIs) registered in the Colombo Stock Exchange under the category of finance and insurance and 33 companies were considered for this research
Summary
Non Bank Financial Institutions (NIFIs) play a significant role in meeting the diverse financial needs of various sectors of the economy and contribute to the economic development of the country as well as deepening of the country’s financial system. Most of the Sri Lankan Banking and Finance sector companies engage in lease financing, is trying to switch over to the new method in respect of all lease transactions, including those which are running as per the requirement of LKAS 17. According to LKAS: 17, the listed leasing companies of Sri Lanka are strictly required to disclose some information stated in paragraph 47 and 56 of LKAS: 17 for preparing the financial statements. The prima facie objective of this paper is to identify the extent of fulfillment of these disclosure requirements in preparation of financial statements of listed Non Bank Financial Institutions in Sri Lanka with the introduction of the revised standard. The findings of this research indicate that the degree of correspondence between the standard as per LKAS: 17 and actual reporting by the leasing companies in Sri Lanka is at a satisfactory level
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