Implications of the new lease proposal - A case study on a multinational manufacturing company and its stakeholders

Abstract

The current lease standard has been criticized for permitting companies to account for similar transactions in different ways, making analysts compelled to adjust for lease obligations not recognized on the balance sheet. In order to overcome this issue IASB (International Accounting Standards Board) and FASB (Financial Accounting Standards Board) released an exposure draft describing a new lease standard. This new proposal has, however, been criticized for implying high costs for companies preparing the financial reports. This paper therefore examines the main implications following the proposal and whether potential benefits will exceed its costs for a chosen company and its stakeholders. The research questions will be attended with the assistance of a model, showing five different perspectives on the proposal. Each perspective is analyzed through interviews with informed respondents which then are compared in order to arrive at a final result. Eventually we come up with the conclusion that differing opinions exist on whether the proposal can be considered as beneficial or not. However, most respondents were fairly neutral to its effects, with a slight predominance of the negative effects.