Jacqueline Mills, senior
adviser with Leaseurope, cut through the confusion to deliver a
microscopic analysis of the minutiae in the lease accounting
re-exposure and what it will mean for Europe’s leasing
industry.
She began by reassuring the
audience on the topic, which had been touched upon several times
during the morning session.
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“There are still lots of issues
which we have to resolve which will take time but it is getting
better,” she said.
Key points to her presentation were
on definitions which had been criticised after the first exposure
in late 2010.
She said the definition of a lease,
which was too broad in the original exposure, will contain a
stronger distinction between a lease and a service where the lease
has narrower definition.
However, Mills added it would still
be difficult to apply in certain situations and would need to be
decided on a case by case basis.
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By GlobalDataMills said concerns raised from the
previous exposure that many finance leases would have to be
considered as deals were changed and “a lease is now a lease and
sales and purchases are defined elsewhere in other guidance”, which
she said was a positive.
Mills said the re-exposure draft
was expected some time in the first half of next year and she
estimated the earliest effective date for the new standard would be
2016 and that even that seemed unrealistic.
“Have the boards got it right yet?”
she asked. “I don’t know but if the concerns about complexity are
resolved most of the benefits for using leasing will remain.”
Mills said the re-exposure was a
good opportunity to remind clients that the benefits of leasing go
beyond the accounting changes.
During the discussion after Mills’ presentation, Alan Leesmith
of IAA Advisory praised Mills and Leaseurope for their work in
highlighting the changes which he said would put European leasing
ahead of others sectors.
See also:
Conference opens with big
questions
