'Leases' and its impact on the financial position and performance of companies

Undergraduate
Essay
Finance & Accounting
Pages 6 (1506 words)
Download 0
The revised exposure draft has made some radical changes in the accounting rules related to lease. This has created mass criticism among many experts. This study highlights on the changes that will be incorporated in the income statement and the balance sheet of the lessee. …

Introduction

Exposure Draft ED/2013/6 'Leases' and its impact on the financial position and performance of companies

Financial accounting Standards Board (FASB) and International Accounting Standards Board (IASB) has revised the Exposure Draft that outlined some proposed changes in the accounting rules for leases. The reason behind such a proposal is just to improve the comparability and quality of financial reporting, by increasing the transparency related to leverage. This signifies the use of assets in the organization in its day to day operations and the exposure to risk by entering into a lease contact. The Exposure Draft has proposed a dual approach through which identification, measurement and presentation of the cash flows and the expenses related to lease can be made. Apart from this, the board has proposed some disclosure that would facilitate the investors and other users of the financial information to understand the uncertainty of cash flow, amount and timing arising from leasing (IFRS Foundation, 2013a). This study focuses on the impact of new revised accounting standards that are framed for leases, on the financial performance and position of the organization.

Delta Airlines is a major airline, which is operating in America. It is headquartered at Atlanta, Georgia. It has an extensive network serving both domestic and international location in almost every continent except Antarctica. The organization along with its subsidiaries is operating with more than 5000 flights everyday and has approximate employee strength of about 80,000. ...
Download paper
Not exactly what you need?

Related papers

Leases. Principles for Financial Reporting, ASB.
Operating leases are known to be one of the off-balance sheet obligations; therefore, the placement of lease accounting continues to be one of the priorities for Financial Accounting Standard Board (FASB) and the International Accounting standards Board (IASB). During March 2009, these boards issued paper referred to as Leases: “preliminary view” which clearly outlined the proposal for new…
The impact of corporate governance on performance of companies: listed on the Saudi Stock Market
The adoption of corporate governance measures is generally accepted as a means of developing shareholder trust and confidence in the midst of economic shocks and volatile financial markets. The need for information is paramount in assessing the risk to investors and to the business. In Saudi Arabia, where family owned and controlled corporations proliferate, the urgency to adopt corporate…
Discussion of the various issues related to corporate governance and its impact on financial performance of companies
The analysis includes a comprehensive literature review on corporate governance, its various mechanisms and the impact on financial performance of firms; as well as P.E.S.T analysis of the four companies. Impact of corporate governance mechanisms on modern companies Contents Sr.# Topic Pg. # 1. Introduction 4 1.1. Purpose of the study 5 2. Brief Background 10 2.1. Meaning and definition 10 2.2.…
Chipotle Mexican Grill Financial Position
The return on equity ratio of Chipotle Mexican Grill in 2008 stands at 0.1320 and it increases in the year 2009 to 0.1912 and to a further increase in 2010 to 0.2364. This shows an improvement in the company’s performance, as it is indicates an increase in the rate of return on the shareholders equity that is going up steadily over the years. …
Analyse the financial performance & position of Intercontinental Hotel Group plc and explain and evaluate the treatment intangib
Background Information Intercontinental Hotel Group Plc. owns one of the leading brand and chain of hotels and resorts across continents. The group’s registered corporate office is located in Denham, United Kingdom and the group has a history of almost 60 years of delivering the highest level of quality of customer service which has permitted the group to achieve phenomenal growth over the last…
Accounting for Leases
This assignment focuses on the alternative treatments which the lessee might adopt. Two, it looks into the current accounting treatment of leases. Finally, it will look into the impact of the proposed lease standards on the users of financial statements. a) Three alternative accounting treatments which might be adopted when lessees account for lease transactions. The lessee capitalizes an asset or…
Analysing the Impact of Capital Structure on the Performance of UK Financial Institutions
The Miller-Modigliani Theory 15 2.4.3. Pecking Order Theory 16 2.4.4. The Agency Cost Theory 18 2.5. Potential Determinants of Capital Structure 19 2.6. Statement of the Problem 26 Chapter 3: Data and Methods 28 3.1. Research Methodology 28 3.2. Research Purpose and Research Approach 29 3.3. Qualitative Research 29 3.4. Quantitative Research 30 3.5. Primary Research 30 3.6. Secondary Research 31…