2500 words

The requirements for the assessment

In May 2013, the International Accounting Standards Board in conjunction with the US Financial Accounting Standards Board published for public comment a revised exposure draft to deal with accounting for leases (currently IAS 17)

The IASB suggests that the proposals aim to “improve the quality and comparability of financial reporting by providing greater transparency about leverage, the assets an organisation uses in its operations and the risks to which it is exposes from entering into leasing transactions.”1

IAS 17 has been subject to criticism on a number of grounds and the issue of the updated exposure draft is the next stage on a long process to review and update the current reporting requirements after having taken due account of the criticisms and comments received from stakeholders.

Required:

Consider the importance of the current work programme examining Leases to the work of the IASB and the development of high quality international financial reporting standards. Review the extent to which the Exposure Draft (“ED”) issued in May 2013, discussions in the literature and comments on the ED identify current underlying weaknesses, and critically assess the significance of proposed revisions on the reporting framework and subsequent views of the IASB. Analyse and evaluate the impact of proposed changes on the financial statements of entities, and whether the proposals in the ED will serve to enhance reporting in this area.