When new lease accounting standards eventually take effect, companies reporting under the international rules are likely to look more profitable than those reporting under U.S. GAAP.
That’s the assessment of the International Accounting Standards Board in its recent comparison of how the lease accounting rules will look when they are finalized, which are expected in 2015. “For lessees that currently have material off-balance-sheet leases, the IASB model will result in higher profit before interest compared to the amounts reported today and under the FASB model,” IASB says. FASB’s model is not expected to result in any material change to a company’s income statement compared to the accounting rules they follow currently.
