The Current Ias 17

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The current IAS 17 shows some defects in practice after issued, and the main defects are mainly consist by poor transparency caused by off balance sheet accounting. Therefore, IFRS was trying to promote the performance of IAS 17 by issued discussion paper and exposure draft since 2009 (ICAEW, 2015). To deal with the off-balance-sheet-accounting 2010 ED intended to eliminate the difference between finance and operating leases that means “all lease give rise to liabilities for future rental payments and a right to use the underlying asset that should be recognised in an entity’s statement of financial position.” (ICAEW, 2015) However, the proposal in 2010 ED would cause new issues like nominal loss, lease industry shrinking. Therefore, 2013 exposure draft modifies the right of use approach by introducing Type A and Type B leases. Generally the changes of 2013 ED took on the identify approach, new definition on underlying asset, and thus affect lessees account and lessors account. To meet the requirement, the 2013 exposure draft is aimed to improve “the quality and comparability of financial reporting” (IFRS, 2013, p.3). IFRS (2013) illustrated that “the core principle of the proposed requirements is that an entity should recognise assets and liabilities arising from a lease” That means changes took on the existing leases requirements that there is no need to let lessees recognise lease assets and lease liabilities. Besides that, a lessee may need to report liabilities and
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