The Wall Street Journal reported that the International Accounting Standards Board issued a new rule that will require companies outside the U.S. to add a “substantial” amount of leases to their balance sheets.
Citing the IASB, the Journal said that the new rule will add $3.3 trillion in leases to balance sheets worldwide.
In response to the announcement, Leaseruope, the umbrella association that representing the leasing and automotive rental industries in 33 countries, said it will review the new rules but hopes that the change will result in a simplification of the lease accounting practices.
“Leasing delivers very significant real economic benefits to millions of European businesses and changing the accounting treatment should have no impact on this,” said Enrico Duranti, chair of Leaseurope. “However, it has been three years since businesses have had a chance to review the new rules and they have changed a great deal in that time. Leaseurope will be reviewing the new standard and the cost/benefit analysis in detail and providing our feedback to EFRAG, but it’s important that European companies that lease property, equipment or vehicles also alert EFRAG and the European Commission if they see any problems.”
The IASB’s rule change coincides with the rule change announced by the FASB at the end of 2015.
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