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A hard test to pass
06 July 2012
Despite recent changes to accounting standards, Yana Palagacheva reports that most aircraft leases will still be accounted for under the accelerated method.
Read more:
accounting standards
leasing accounting
aircraft lessors
International Accounting Standards Board
IASB
To be or not to be on the balance sheet? This question has been on the agenda of the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) for several years. Sir David Tweedie, IASB former chairman, was even quoted as saying that one of his lifelong ambitions was to fly on an aircraft that was on the airline’s balance sheet. After the boards agreed that all leases over 12 months will be on a company’s balance sheet, the next big question has been: how will they be accounted for?
At a June meeting the boards provisionally chose a dual accounting model (see FASB and IASB decide on lease accounting approach, page 13). This decision came after the boards agreed to revise their original proposals from 2010. Many airlines and aircraft lessors criticized the original proposals, saying that they created unnecessary and expensive adjustments....
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