Fleet and finance managers have been warned that the rules governing how leased assets, including vehicles, are accounted for on company balance sheets are likely to be changed.

The International Accounting Standards Board (IASB) has published details of how it wants the rules changed.

It has proposed a new model that will require lessees to recognise an asset for their right to use the leased item that includes rights under optional lease periods.

“Businesses should be aware that the proposed changes will have much wider reaching consequences than just an increase in their assets and liabilities. Income statements will be affected and the future approach will create immense complexity for the preparers of accounts,” warned Mark Venus chairman of Leaseurope’s Accounting Committee.

“This looks like another example of standard setters coming up with a standard that will lead to increased volatility and pro-cyclicality in financial reporting,” adds Venus. “The burden for lessees should not be underestimated.”

Leaseurope said the IASB proposals are “unnecessarily complex” and the costs associated with implementing them “are likely to be disproportionate to the gains for the users of accounts and it may very well obscure the true economic benefits that leasing offers”.

However, the BVRLA said that all the signs so far are that the planned should not damage the commercial benefits of vehicle leasing.

“In fact, the more robust reporting requirements could give BVRLA members an opportunity to deliver more in the way of added value service to their customers,” it said.

Companies can comment on the proposals at www.iasb.org until July 31.