Lease Accounting Research Articles

СУТНІСТЬ ТА КЛАСИФІКАЦІЯ ОПЕРАЦІЙ З ОРЕНДИ (ЛІЗИНГУ) МАЙНА ПІДПРИЄМСТВА

The article is devoted to the problematic issues of economic essence and classification of operations on rent (leasing) of enterprise property. The legal regulation of lease accounting in Ukraine is carried out by a number of national regulations and international accounting standards. Each legislative document reveals the concept of lease in accordance with the scope of its application. Having considered the content of lease relations, one can observe certain contradictions of their economic and legal essence. For the needs of accounting, the regulatory framework is National Accounting Standard (NAS) 14, according to which rent and leasing are equivalent concepts, but this equality is incorrect from a legal point of view. Tax legislation also identifies these concepts. The study of the classification of lease (leasing) operations allowed to draw conclusions about the similarity of the options and features proposed by domestic and foreign scientists. The disadvantages of the studied classifications are insignificant changes in definitions, the formation of distribution by features that do not meet the needs of accounting. For a correct understanding of the classification of lease transactions, it is necessary to be guided by the need to reflect the lease in the accounting accounts for the possibility of drawing up reliable financial and management reports of the enterprise.Division of lease by periodicity, peculiarities of use, object of property are not essential for accounting and management accounting at the enterprise. To improve the reliability and accuracy of financial and management reporting, it is necessary to study in depth the essence of lease transactions and their reflection in accounting. Proposalsfor improving existing classifications are presented, which will contribute to the effective organization of accounting, control and analysis of lease operations at the enterprise. The developments can be used in the theoretical substantiation and practical development of the methodology for classification of lease (leasing) operations at Ukrainian enterprises.

ПРАКТИЧЕСКИЙ ОПЫТ ПРИМЕНЕНИЯ ФСБУ 25/2018 "БУХГАЛТЕРСКИЙ УЧЁТ АРЕНДЫ" В РОССИЙСКОЙ ФЕДЕРАЦИИ

This article discusses the main practical ex- perience of using FSBU 25/2018 "LEASE ACCOUNTING" IN THE RUSSIAN FEDER- ATION. Serious application of IFRS may have a positive impact on those Russian companies that do not plan to enter the in- ternational (financial) markets in the near future. The effectiveness of the application of IFRS will lie in the fact that providing man- agers with information that will contribute to the competent treatment of the market and the investor will also not destroy, but only strengthen the system of corporate trust and behavior. The most effective application of IFRS in companies will be the owner, who does not have representatives in the com- pany's management and will not be forced to be content with information from the financial statements.

The Historiography of Accounting: Diponegoro [Lease & Tax] Accountability

This study aims to examine lease accounting and taxation in the Sultanate of Yogyakarta during the Diponegoro era, lessons acquired through conflicts over these occurrences, and their significance with lease accounting standards (PSAK 73). This qualitative research uses history books, e-journals, accounting standards, and videos about Sultanate of Yogyakarta. This study reveals that land leasing and taxation practices during the period lacked internal and external accountability. Some events in the Sultanate of Yogyakarta during that time are pertinent to current events reviewed using PSAK 73, such as the relationship between Zimbabwe and China and the experience of Indonesian tenant farmers. Accounting, tax, and agrarian policymakers need field research with enough samples to improve policy implementation.

Accounting for contractual obligations in a finance lease transaction

Discussions on lease accounting have been going on among accounting researchers for at least 100 years. However, they are reduced to one goal - the recognition of the lease as an object of accounting. At the same time, the lease determines the totality of accounting for various objects and entities involved in the system of lease relations based on the system of property objects transferred for rent from the lessor to the lessee. Consequently, the objects of lease accounting should be economic resources transferred under a lease agreement to the lessee with the right to use them for a certain period of time for the production of other goods or services by the lessee and reimbursement of the value of the property received and the corresponding variable remuneration to the lessee for the right to use the leased assets expressed in the form of contractual obligations of the lessee. The content of the article proposed for consideration is based on the disclosure of the content of this author's position.

Presentation of accounting information on non-current assets using simplified methods

Subject. This article deals with the topical issues of the methodology for accounting for non-current assets using simplified methods due to changes in the accounting legislation of the Russian Federation in terms of the application of Federal Accounting Standards FSBU 6/2020 – Fixed Assets, FSBU 26/2020 – Capital Investments and FSBU 25/2018 – Lease Accounting. Objectives. The article aims to group simplified accounting methods for non-current assets and apply them when presenting accounting information about these assets. Methods. For the study, we used the methods of analysis, systematization, comparison, and grouping. Results. Based on the analysis of changes in accounting legislation on accounting for non-current assets, the article groups the statutory regulation of simplified methods. It offers accounting records for intangible assets, property, plant and equipment, capital investments and lease items, and defines the main simplified ways of accounting for non-current assets that must be approved in the accounting policy. Conclusions and Relevance. Based on the analysis of federal accounting standards, the article concludes that the development and practical application of simplified methods of accounting are relevant for reflecting the accounting events by small businesses and non-profit organizations. The results obtained can be applied both in the theory and practice of accounting in relation to the accounting of items using simplified methods.

Development of a Disclosure Index for Lease Accounting Policies: Evidence from Romanian Banks

Leasing is an important financing solution used by banks to carry out their daily operations. From a lessee perspective, IFRS 16 changed completely the accounting landscape for lease contracts. A right of use assets and a corresponding lease liability must be recognized in the lessees’ balance sheets. Additionally, extensive disclosures are required. This paper aims to study the extent to which Romanian banks comply with IFRS 16 disclosure requirements. The population includes 23 Romanian banks. To carry out this research, we employed the content analysis technique and reviewed the IFRS 16 disclosures from the 2020 IFRS financial statements. To measure compliance, we developed a dichotomous and unweighted disclosure checklist, which includes 34 items grouped into six categories. The results of our study revealed that, in the first year following the IFRS 16 transition, Romanian banks recorded an average 62% level of compliance with IFRS 16 disclosure requirements. There is a lot of room for improvement in the following years, especially for top ten ranked banks.

Учет арендных операций в новых условиях

The article analyzes the issues of accounting for lease transactions in accordance with the FSBU 25/2018 "Lease Accounting" that came into force on 01.01.2022. Accounting for assets and liabilities subject to recognition and evaluation by both the lessor and the lessee is considered. A number of examples of accounting for rent from the lessor and lessee when transferring ownership of the lease to the lessee and when returning the leased object to the lessor are given. Recommendations are proposed to auditors auditing the financial statements of participants in rental relations.

Учет и аудит арендных операций в новых условиях

The article analyzes the issues of accounting for lease transactions in accordance with the FSBU 25/2018 "Lease Accounting" that came into force on 01.01.2022. Accounting for assets and liabilities subject to recognition and evaluation by both the lessor and the lessee is considered. A number of examples of accounting for rent from the lessor and lessee when transferring ownership of the lease to the lessee and when returning the leased object to the lessor are given. Recommendations are proposed to auditors auditing the financial statements of participants in rental relations.

The Impact of a New Accounting Standard on Assets, Liabilities and Leverage of Companies: Evidence from Energy Industry

The climate policy of the EU enforced substantial changes for producers and suppliers of energy. New assets and providers of capital are needed to fulfill the policy requirements. To provide comparability and facilitate an investment process, EU law requires companies to prepare annual financial statements according to International Financial Reporting Standards. One of these accounting standards—IFRS 16 Leases—specifies how to recognize, measure, present and disclose leases. It came into force in 2019 and implemented a single lessee accounting model, contrary to a dual accounting approach for lease accounting. The latter approach enabled companies to keep leased tangible assets and respective liabilities off-balance sheet. By using a sample of companies from the energy industry (oil, gas, energy and mining sectors) that are listed on the Warsaw Stock Exchange, we examine, measure, and analyze the impact of IFRS 16 Leases implementation on the value of assets, liabilities and leverage on assets and leverage on equity. The paper may serve as an insightful case study of how the implementation of a new standard influences the financial situation of the affected companies in the energy industry. Our paper contributes to the scientific debate in the following three ways: (1) we confirmed the influence of IFRS 16 Leases on assets, liabilities, leverage on assets and leverage on equity that was anticipated in the literature, (2) using the auditing methodology, we demonstrated the material changes of assets and liabilities in the energy industry, (3) based on the research results, we suggested recommendations for further scientific studies.

Accounting for rental fixed assets

The article systematizes the basic requirements for the formation in accounting of information about fixed assets when they are received or provided for a fee for temporary use, as well as the conditions and criteria for recognizing accounting objects as lease accounting objects. Specific examples show how to determine the present value of lease payments, the net worth of an investment in a lease, and the amount of interest accrued. Organizational and methodological recommendations are proposed for rationalizing the accounting of operations of operating and non-operating (financial) lease of fixed assets, respectively, from the lessee and the lessor.

The Impact of Lessee and Lessor Accounting in Local Councils

AbstractThis paper examines the impact of capitalising operating leases on the financial ratios for New Zealand councils (local government). It finds that required financial management and leverage ratios significantly worsen, but by an immaterial amount. In contrast, return on assets significantly increases by a material amount. This extends the constructive lease capitalisation literature to public benefit entities. This paper also discusses the role of councils as both lessees and lessors and that any change to lessor accounting for operating leases would have a greater impact on councils, although likely still immaterial. As a recent exposure draft suggests the convergence of International Public Sector Accounting Standard lease accounting with International Financial Reporting Standard 16, this paper provides timely evidence to standard‐setters.

Current issues of accounting for the lease agreement in accordance with FSB 25/2018 "Lease accounting"

Current issues of accounting for the lease agreement in accordance with FSB 25/2018 "Lease accounting"

IFRS 16 «Аренда»: основные причины возникновения

Renting has become increasingly important in recent years. Often, international business representatives, and sometimes entire industries, opt for leasing, refusing to purchase large and expensive assets. Such industries include retail companies, airlines, healthcare, telecommunications, transport, logistics, etc. These business representatives, due to the specifics of their activities, prefer leasing the largest assets to acquiring them. IFRS 16 Leases, published on January 13, 2016, became mandatory for the first time when reporting for 2019 by entities. This standard is a recommendation for the reflection in the financial statements of organizations of information about objects that have been transferred or received on lease. The methodology for reflecting leases in financial statements has often become the subject of discussion in professional circles. Dissatisfaction with the provisions of the earlier IAS 17 “Leases” on the part of business representatives, analysts, scientists and other users provoked the development and subsequent adoption of IFRS 16 “Leases”. The article explores the main prerequisites and reasons for the development of new provisions, which later became the basis for the current international standard for accounting for leases. The purpose of the work is to identify the main negative consequences of the application of IAS 17 “Lease”, the main reasons for the development of the provisions of IFRS 16 “Lease”, which is in force today. An analysis of the reasons for the emergence of this standard and foreign experience in its use will help to assess the consequences of applying its Russian counterpart FSBU 25/2018 “Lease Accounting”: to analyze the possibility of solving the main issues that arise for external and internal users of financial information, and to determine the impact of the new domestic standard lease accounting has an impact on the reliability and comparability of financial statements, the financial condition and performance of Russian companies, which is of scientific value. In the course of the study, such general scientific methods of cognition as comparative analysis, generalization of theoretical and factual material were used. It was found that the application of IAS 17 “Lease” by companies had a negative impact on the accuracy and transparency of reporting compiled by companies, which provoked dissatisfaction on the part of investors, analysts and other users. The author gives the main reasons for changing the previously existing lease accounting model and further development of IFRS 16 “Leases”.

Debt Contracting and Changes to the Accounting for Leases: Implications of Accounting Standards Codification 842

Debt Contracting and Changes to the Accounting for Leases: Implications of Accounting Standards Codification 842

Reporting Incentives and Consequences of Lease Accounting Standards

Reporting Incentives and Consequences of Lease Accounting Standards

Leases that are not leases: qualification and accounting

On the eve of the entry into force for the mandatory application of all enterprises and organizations of the Russian Federation of the Federal Accounting Standard 25/2018 “Lease Accounting”, approved. By order of the Ministry of Finance of Russia dated October 16, 2018 No. 208n, from January 1, 2022, many heads of economic structures, including healthcare organizations, and their accountants, who act as tenants in lease agreements, are concerned about avoiding the complicated accounting of leased objects which is prescribed by this standard. Accounting methodologists, consultants, experts, and others try to use literally every clause, subclause, paragraph, every word and every comma in order to justify that their lease relationship is not covered by this accounting standard.

Problem aspects of application by state enterprises of international standards of accounting and reporting in rental operations

The purpose of the article is to determine the peculiarities of public sector enterprises' use of international and national accounting and financial reporting standards governing the accounting of lease transactions, study the impact of their provisions on financial reporting indicators, substantiation of the most acceptable lease accounting models for public sector enterprises. The information base of the empirical study was the data of the official website of the Ministry of Economic Development, Trade and Agriculture of Ukraine for 2013-2020. Methodical and methodological basis of accounting for lease transactions were the provisions of P (S) of Accounting 14, NP (S) of Accounting SS 126, IPSASB 13, IAS 17, IFRS 16. In the study used such techniques as comparison, l, time series, structural -dynamic and coefficient analysis. The essence of the concept of "lease" is clarified on the basis of a comparative analysis of its various definitions given in international, national standards of accounting and financial reporting for business entities, public sector entities, as well as in other regulations. The conceptual model of rent accounting for P (S) of Accounting 14, NP (S) of Accounting SS 126, IPSASB 13, IAS 17 and IFRS 16 is considered, the problematic aspects of its application in the accounting practice of domestic state enterprises are identified. Discussion issues concerning the application of the provisions of IAS 17 are highlighted, which include: the lack of a financial component in rental costs; lack of information in the financial statements about lease obligations not incurred by the company; Insufficient information in the financial statements about the existence of the asset to which the lessee has the right to use. The results of the study are to identify the key problems of the lease accounting model in accordance with IAS 17 for state-owned enterprises and make suggestions for their solution. Recommendations for assessing the impact of the lease accounting model in accordance with IFRS 16 on the financial statements of the lessee have been developed. The main directions of elimination of obstacles to the implementation of IFRS in the domestic accounting practice concerning the lease operations of state-owned enterprises are identified.

The Effect of Capitalising Operating Leases On Charities

AbstractThis paper examines the effect of capitalising operating leases on the total liabilities to total assets and surplus to total asset ratios for a sample of New Zealand charities. It finds that both ratios have significantly increased post‐capitalisation and that expenditures change. This extends the constructive lease capitalisation literature to the not‐for‐profit sector. This paper also discusses the characteristics of charities’ operating leases and how they differ from the for‐profit sector. Overall, this paper provides timely evidence to standard setters, especially considering the current exposure draft converging International Public Sector Accounting Standard lease accounting with International Financial Reporting Standard 16 Leases.

Development of lease accounting in the conditions of application of the new federal standard

In the context of the changeover from national accounting standards to international financial reporting standards, a number of issues arise that require additional research. The article discusses the problems of calculation the fair value of the leased object and the discount rate in the new federal standard FSBU 25/2018 "Lease accounting". The methodological base of the study includes a critical analysis of the new requirements for accounting for lease transactions in the system of new federal accounting standards in terms of their validity, completeness and consistency.

Identification of Leases Under the New Leasing Standard

The Financial Accounting Standards Board issued significantly revised standard on lease accounting in 2016. The new standard became effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those reporting periods for public business entities. Under the new standard, a lessee recognizes a right-of-use asset and a lease liability for all leases, including operating leases with a term greater than 12 months, which will significantly increase the reported assets and liabilities for many lessees. The critical accounting determination is whether or not a contract is/contains a lease. This determination becomes the new on- or off-balance sheet test. This paper discusses the concepts of identified assets and of the right to control the use of an asset. Examples are used to illustrate the application of the concepts.