Leaseurope, ELFA, CFLA Call on IASB to Reassess Lease Accounting for SMEs

Leaseurope, the Equipment Leasing and Finance Association and the Canadian Finance and Leasing Association issued a joint response to the International Accounting Standards Board (IASB)’s Comprehensive Review of the IFRS for SMEs Standard. The response noted that although the inclusion of certain simplifications to IFRS 16 in the proposals is helpful in principle, it is no substitute for full analysis before regulation that is clearly designed for larger companies is imposed on smaller firms. Without this, the IASB would clearly not be following the ‘Think Small First’ SME regulation principle, according to the response. The response calls for genuinely independent cost-benefit analysis that is specific to SMEs before any decisions are made on possible changes to lease accounting under SME accounting regulations.

Working with its global partners, Leaseurope has been lobbying on the IFRS 16 lease accounting rules since 2006. The rules were finally approved for use in Europe in October 2017 and have been effective since January 2019. IFRS 16 is used mainly by large, listed firms and most European companies follow national accounting standards. IFRS for SMEs is not approved for use in Europe; however, European national accounting standard setters often refer to changes in IFRS for SMEs when thinking about new versions of their own SME accounting rules.

Leaseurope brings together 45 associations throughout Europe representing either the leasing, long term and/or short term automotive rental industries.

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