Week 5 Discussion Question 3

Week 5 Discussion - this article is “the proposal in the discussion paper would require all leases to be treated by lessees as capital

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Week 5 Discussion Question 3: Select a current event article related to accounting for leases. Post the link to the article and then summarize your thoughts on the article. The “early bird gets the worm” so to speak regarding article link postings. If someone else has chosen and posted a link you were going to use, please select another . Do you have any questions after reading this article? If so, please post so other class members can answer/address. http://www.mondaq.com/unitedstates/article.asp?articleid=80034 The article I chose for this assignment was written by, Timothy H. Shea, and is titles “United States: Looming Lease Accounting Rule Changes: Impact on Earnings, Debt Covenants, Compensation Arrangements, and Earnout Agreements”, it was written on May 21, 2009. The article is about the FASB and IASB issuing “a joint discussion paper on accounting for leases by lessees” (Shea, 2009, p. 1). One of the changes discussed by Mr. Shea in
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Unformatted text preview: this article is “the proposal in the discussion paper would require all leases to be treated by lessees as capital leases (known as financing leases under international financing reporting standards), Accordingly, lessees would no longer be able to treat any of their leases as operating leases” (Shea, 2009, p. 1). This article also discusses “Current Lease Accounting Standards for Lessees Under U.S. GAAP”, “Criticisms of the Existing Lease Standards”, “Proposed Changes to Lease Accounting”, “Implications”’ and “Example Leases”. The question I have after reading this article is that if they void all operating leases will that mean that under the terms of capital lease, will the ownership be transferred to the lessee at the end of the lease? If this were to happen, how is lessor able lease an apartment to more than one tenant? (Or have I misunderstood completely?)...
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This note was uploaded on 02/19/2010 for the course ACC 362 taught by Professor Wormer during the Spring '07 term at University of Phoenix.

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