Lease accounting draft finally published

The long-awaited second exposure draft (ED2) of the new global lease accounting standard has finally been published.

The International Accounting Standards Board’s proposals are intended to bring all leased assets on to the balance sheet, giving a more complete picture of a business’s financial position.

Under current rules the split into finance and operating leases determines whether or not the asset goes on the balance sheet.

Under the new proposals all leases, except those that cannot run for more than 12 months, will go on balance sheet.

The BVRLA is confident that bringing leased vehicles on to a firm’s balance sheet will not erode the key benefits of leasing.

"Leasing has proved its value, sheltering companies from the risk of fluctuating vehicle values, providing them with extra flexibility and purchasing power, and freeing up precious working capital that would otherwise have been spent buying an asset,” said BVRLA chief executive Gerry Keaney.

"Our members already advise customers on how to reduce fleet costs and emissions and I am confident they can add even more value by helping them with reporting requirements.”

The IASB will publish a final standard towards the end of 2013.