PN:Changes to Accounting for Lease-SFAS 13
Hi All,
IASB (International Accounting Standard Board) and US FASB (US Financial Accounting Services Board) have released changes to Accounting for Leases during 2009.
According to the Changes there will be no distinction between Operating Lease and Finance Lease i.e., Lessee would require to recognize Asset and Liability for Operating Lease as well.
Following are highlights of the Changes in SFAS-13- Accounting for Lease:
--> the Lessee has to recognize Asset and Liability under Operating Lease
--> there will be two component to the Charge in Profit & Loss Account, one is Depreciation Expense and the Other is Interest
Expense (Previously the amount was charged as Lease Rentals in Profit & Loss Account).
IASB (International Accounting Standard Board) and US FASB (US Financial Accounting Services Board) have released changes to Accounting for Leases during 2009.
According to the Changes there will be no distinction between Operating Lease and Finance Lease i.e., Lessee would require to recognize Asset and Liability for Operating Lease as well.
Following are highlights of the Changes in SFAS-13- Accounting for Lease:
--> the Lessee has to recognize Asset and Liability under Operating Lease
--> there will be two component to the Charge in Profit & Loss Account, one is Depreciation Expense and the Other is Interest
Expense (Previously the amount was charged as Lease Rentals in Profit & Loss Account).
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