Leaseurope has warned of wider economic
consequences if leasing becomes harder to access for SMEs and
startups as a result of proposed new lease accounting rules.
Europe’s trade body for lessors said in its
response to the draft standard on lease accounting that a large
number of companies across Europe rely on leasing to finance their
activity. Leaseurope also claimed that the quality of the draft
standard, issued by the IASB in August 2010, was too poor to enable
the standard setter to respect its self-imposed deadline for the
final version of June 2011.
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Mark Venus, chairman of Leaseurope’s
accounting committee and projects director at BNP Paribas, said:
“The level of comment has been exceptionally high and by now the
standard-setting boards [IASB and the US FASB] should be fully
aware of the extent of reasoned criticism of their proposals. We
trust that these views will be appropriately integrated into their
upcoming discussions and re-deliberations on the future lease
accounting framework.”
Leaseurope repeated earlier criticism that the
definition of a lease contract is inadequate, and argued that the
proposed right of use approach has been applied inconsistently,
especially in the case of lessors.
The draft standard was described as likely to
have significant impact on business and was expected to provide
users of financial statements with no better information than they
already have. Three quarters of respondents to a survey of
preparers of accounts in Europe, commissioned by Leaseurope, said
the cost of the new standard outweighs its benefits.
To read Leaseurope’s comment letter in
full,
click here
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