According to research from Grant Thornton’s International Business Report, 54% of global businesses are not aware of, and are therefore unprepared for, one the most significant global accounting changes in the past decade: the virtual elimination of off-balance sheet leases.
Awareness of the change was greatest in the United States(69%), Mexico (68%) and Chile (63%), and was lowest in mainland China (5%), Denmark (8%) and Turkey (13%).
The survey of 2,800 businesses globally was completed in early September 2011 and also found that, of those who were aware of the changes, 33% thought the change would increase cost and complexity, but only 15% thought it would increase transparency. Only 12% of business indicated they would alter the way they structure leases in the future.
According to Grant Thornton, the SEC estimated the undiscounted value of future lease payments among U.S. listed companies alone at more than $1.25 trillion in a report issued in 2005 – an amount that is greater than the gross domestic product of many countries. Globally, the figure is far greater.
To read the full news release of the survey click here.
No tags available
Changing market demands are forcing transition in the vendor finance marketplace. What was once a simple sales finance tool used to facilitate the acquisition of capital equipment using firm-term contracts such as leases, loans or equipment finance agreements is now... read more
Interim rent accounting in practice has been inconsistent and, in some cases erroneous, under current GAAP for both lessees and lessors. That will change in a big way as lessee CFOs and auditors increase their focus on lessee accounting, since... read more