Accounting Operating Lease- A Constructive Capitalisation Strategy

Natarajan, P.; Kuniparambil, Mohamed Ali

doi:10.2139/ssrn.3403422

Cited by 2 publications

(1 citation statement)

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“…Analysing the results of the impact of the application of IFRS 16 "Leases" on credit risk assessments, American scientists (Vidovic et al, 2019) stated that the new approach to accounting for leases and the order of their reflection in the financial statements of assets and balance sheet liabilities change significantly, which in turn affects the results of assessing the creditworthiness of companies. Confirmation of the significant impact on the financial performance of operating lease capitalization companies and its benefits for management decisions has also been made by many other scholars (Natarajan & Kuniparambil, 2019;Aurora, 2020). ijmp.jor.br v. 12, n. 6, Special Edition ISE, S&P -November 2021ISSN: 2236-269X DOI: 10.14807/ijmp.v12i6.1762 A similar conclusion was reached by South African scholars (Segal & Naik, 2019), who based on information obtained in a public debate conducted jointly by the International Accounting Standards Board (IASB) and the South African Institute of Chartered Accountants (SAICA), confirmed that the application of IFRS 16 "Lease" lead to changes in the configuration of the balance sheet, and thus affects the liquidity and solvency of the enterprise.…”

Section: Literature Reviewmentioning

confidence: 71%

Problem aspects of application by state enterprises of international standards of accounting and reporting in rental operations

Rohoznyi

Parasiy-Vergunenko

Kutsyk

et al. 2021

Ind. Jour. Manag. & Prod.

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The purpose of the article is to determine the peculiarities of public sector enterprises' use of international and national accounting and financial reporting standards governing the accounting of lease transactions, study the impact of their provisions on financial reporting indicators, substantiation of the most acceptable lease accounting models for public sector enterprises. The information base of the empirical study was the data of the official website of the Ministry of Economic Development, Trade and Agriculture of Ukraine for 2013-2020. Methodical and methodological basis of accounting for lease transactions were the provisions of P (S) of Accounting 14, NP (S) of Accounting SS 126, IPSASB 13, IAS 17, IFRS 16. In the study used such techniques as comparison, l, time series, structural -dynamic and coefficient analysis. The essence of the concept of "lease" is clarified on the basis of a comparative analysis of its various definitions given in international, national standards of accounting and financial reporting for business entities, public sector entities, as well as in other regulations. The conceptual model of rent accounting for P (S) of Accounting 14, NP (S) of Accounting SS 126, IPSASB 13, IAS 17 and IFRS 16 is considered, the problematic aspects of its application in the accounting practice of domestic state enterprises are identified. Discussion issues concerning the application of the provisions of IAS 17 are highlighted, which include: the lack of a financial component in rental costs; lack of information in the financial statements about lease obligations not incurred by the company; Insufficient information in the financial statements about the existence of the asset to which the lessee has the right to use. The results of the study are to identify the key problems of the lease accounting model in accordance with IAS 17 for state-owned enterprises and make suggestions for their solution. Recommendations for assessing the impact of the lease accounting model in accordance with IFRS 16 on the financial statements of the lessee have been developed. The main directions of elimination of obstacles to the implementation of IFRS in the domestic accounting practice concerning the lease operations of state-owned enterprises are identified.

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Section: Literature Reviewmentioning

confidence: 71%

Problem aspects of application by state enterprises of international standards of accounting and reporting in rental operations

Rohoznyi

Parasiy-Vergunenko

Kutsyk

et al. 2021

Ind. Jour. Manag. & Prod.

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International regulation practice of accounting of lease (rental) operations: comparative aspect

Rohoznyi¹

2020

Nauk. pr. NDFI

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Lease is a convenient tool of financing for lessees and popular object for investing for the lessors. Also lease operations are the objects of national and international regulation. The purpose of the article is to analyze the globally applicable international regulations of lease transactions in terms of their accounting. The main features of their implementation in the world in general and in Ukraine in particular is also an important direction. The basis of this study is the dialectical method of scientific cognition and the systematic approach. Using analysis and synthesis, the features of normative legal lease regulation and its main elements were determined. Grouping and comparison method allowed to study in detail old and new approaches of international financial reporting standards (IFRS) regarding lease. Information modeling and tabular methods were the basis for the forming of results and visual presentation of the generalizations and conclusions. The importance of IFRS in the context of global harmonization of accounting approaches in the world are explored in the article. The feasibility of introducing a new rental standard from January 1, 2019 is implemented. The key differences between IAS 17 and IFRS 16 in terms of terminology and classifications are identified. A comparative characteristic of accounting models underlying IAS 17 and IFRS 16 is conducted. Peculiarities of introducing a new category “right-of-use asset” into the balance sheet and options for its reflection on accounting accounts are investigated. IFRS for SME in terms of lease transactions is analyzed and its similarity in all key aspects to IAS 17 is revealed. Due to the complexity of leasing operations, the relevance of specialized clarifications and consultations is considered. The sphere of scientific interests of foreign scientists in the accounting for lease operations is analyzed.

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Accounting Operating Lease- A Constructive Capitalisation Strategy

Cited by 2 publications

References 0 publications

Problem aspects of application by state enterprises of international standards of accounting and reporting in rental operations

Problem aspects of application by state enterprises of international standards of accounting and reporting in rental operations

International regulation practice of accounting of lease (rental) operations: comparative aspect

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