Convergence On A Global Accounting Standard For Leases Impacts Of The FASB/IASB Project On Lessee Financial Statements

Abstract

In this paper, we compare the current U.S. GAAP and IFRS lease accounting rules with the proposed rules under the joint FASB/IASB projects exposure draft as modified by their redeliberation decisions. Additionally, we discuss the potential financial statement impacts of the proposed changes and provide examples of the effects of constructive capitalization of operating leases on the financial statements and resulting ratios for matched pairs of Global Fortune 500 companies in industries, with each pair consisting of a company that follows U.S. GAAP versus one that follows IFRS.