imported>Doug Williamson |
imported>Charles Cresswell |
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| International Accounting Standard 17, dealing with leases. | | International Accounting Standard 2, dealing with inventories. |
| | | Issued by the International Accounting Standards Board. |
| IAS 17 requires finance lease liabilities to be accounted for 'on balance sheet'.
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| It also requires the appropriate allocation of the total lease instalments between finance charges and reduction of the outstanding lease liability.
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| Under IAS 17 the total finance charge should be spread in such a way as to produce a constant periodic rate of interest on the remaining balance of the liability.
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| However, IAS 17 also allows for some form of approximation to be used to simplify the calculation.
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| Fully accurate calculation bases for spreading the total finance charge include the Actuarial method.
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| The Sum of the digits method is simpler to apply, and will normally produce a close approximation.
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| === Future developments ===
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| Differences in accounting standards can lead to significant non-comparability. A joint IASB-FASB project is seeking to improve and align accounting for leases by developing an approach that is more consistent with other definitions of assets and liabilities.
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| The project would result in a replacement of IAS 17.
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| == See also == | | == See also == |
| * [[Actuarial method]]
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| * [[FASB]]
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| * [[Finance charge]]
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| * [[Finance lease]]
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| * [[IASB]]
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| * [[International Financial Reporting Standards]] | | * [[International Financial Reporting Standards]] |
| * [[Off-balance sheet finance]]
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| * [[Operating lease]]
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| * [[SSAP 21]]
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| * [[Sum of the digits]]
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| * [[IFRS 16]]
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| [[Category:Accounting,_tax_and_regulation]] | | [[Category:Accounting_and_Reporting]] |
| | [[Category:Legal_Documentation]] |