By Rob Starr, Content Manager, Big4.com
The Grant Thornton International Business Report (IBR), the average business holds 20 leases. The average was highest in Sweden (68 leases per business), followed by Japan (49 leases per business), Finland (39 leases per business) and Australia (25 leases per business) according to Grant Thornton.
The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) are set to publish revised proposals for a new lease accounting standard but a survey of 3,450 businesses in 44 economies finds that, although 78% hold leases, only 42% are aware of these proposed global changes that could drastically alter their balance sheet.
“We welcome efforts to improve the definition of a lease in order to distinguish leases from service contracts and address concerns about front-loaded expense recognition. The key question now is whether these changes address constituents’ concerns sufficiently to enable the project to move forward – if not then a reboot will be needed,” said Ed Nusbaum, Grant Thornton International Ltd. CEO.
The survey was conducted by Experian in November and December 2012 as part of the quarterly Grant Thornton International Business Report with 3,450 respondents in 44 economies. The global impact of the standard is expected to require companies reporting under US GAAP and IFRS to now record trillions of dollars of new assets and liabilities.