In an article on the proposed lease accounting rules, Accountancy Age says that critics of the new rules have warned that bringing leases onto company balance sheets may lead to artificial structuring of lease agreements.

The trade publication notes that the boards have attempted to limit artificial structuring of long-term leases into short-term ones by specifying that the 12 months or less term must include options to extend. Nevertheless, companies may push for more short-term leases to avoid putting them into the accounts.

Fitch Ratings has also warned that the proposals could encourage companies to shift to short-term leases or restructure their agreements as service contracts.

To read the Accountancy Age article click here.

Previously on monitordaily: Fitch: Accounting Rules May Encourage Short-Term Leases, May 22, 2013