Date of Completion

Spring 5-8-2011

Thesis Advisor(s)

Lawrence Gramling

Honors Major

Accounting

Disciplines

Accounting

Abstract

On August 17, 2010 the IASB and FASB published an Exposure Draft on leases. A new accounting model for leases which would include both financing lease and operating leases was proposed. According to the World Leasing Yearbook 2010, $640 billion was involved in leasing activity, of which a significant amount is not reported on the lessees' balance sheets [1]. The current leases which firms report in the financial statement notes showed that most companies currently have financing leases although many do not capitalize all of these leases. The new accounting model for leases would be a challenge for companies to make judgments based on estimation of contingent rentals, reassessments of estimates of lease payments and "more likely than not" definition of the "lease term". The purpose of this research is to find out the impact on both lessees' and lessors' financial statement after the implementation of the new accounting model for leases.

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