FASB has develop new accounting standards for accounting for leases. These new standards are not covered...

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Accounting

FASB has develop new accounting standards for accounting forleases. These new standards are not covered in your text book.Research the new FASB Lease Accounting Standards and answer thefollowing questions:
1. Why did FASB develop new lease accounting standards?
2. How will accounting for leases change under these newstandards?
3. When will the new standards take effect?
4. How will the changes effect companies who lease assets/
5. Based on your reading and research do you think companies areprepared for these changes?
Submit a paper containing your answers and observationsconcerning these questions and suggestions you would make tocompanies who are preparing to implement the new standards.

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Ans 1 Financial Accounting Standard Board FASB has developed new lease accounting standards to improve financial reporting about leasing transactions The new leases standard will increase transparency and comparability among organizations that lease buildings equipment and other assets by recognizing the assets and liabilities that arise from lease transactions In other words current offbalance sheet leasing activities will be required to be reflected on balance sheets so that investors and other users of financial statements can more readily and accurately understand the rights and obligations associated with these transactions Ans 2 The FASB lessee accounting model retains two types of leases and is consistent with the lessee accounting model under existing GAAP One type of lease finance leases will be accounted for in substantially the same manner as capital leases are accounted for under existing GAAP The other type of lease operating leases will be accounted for both in the income statement and statement of cash flows in a manner consistent with operating leases under existing GAAP However as it relates to the balance sheet lessees will recognize lease See Answer

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