Changes in Accounting Principles The International...

The purpose of this paper is to discuss the changes in accounting for leases according to the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). FASB published a release on May 16, 2013 proposing an improvement to the value and comparability of financial statements. The goal of the IASB and FASB was to provide a greater transparency about leverage, the assets an organization uses in its operations, and the risks to which it is exposed from entering into leasing transactions (Fasb.org, 2013). Keywords: accounting for leases, IASB, FASB Changes to Lease Accounting Leasing is a very important source of financial income for a wide range of organizations. Therefore, the way in which organizations account for leases is essential. The standards for lease accounting had been criticized for failure to meet the needs of users of the financial statements because they did not provide a reliable representation of leasing transactions (Fasb.org, 2013). In 2006, the IASB and the FASB began a joint project by creating an Exposure Draft with proposals to improve the financial reporting of leasing activities under International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (GAAP) in response to the criticism. On May 16, 2013 the FASB and IASB released a revised Exposure Draft proposing changes to lease accounting. The proposal aims to improve the quality and comparability of financialShow MoreRelatedSummary of Research for Accounting Changes and Error Analysis1143 Words   |  5 Pages Summary on Research for Accounting Changes and Error Analysis Companies have always faced issues of how to reflect changes in accounting methods and error corrections in financial statements. 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