Recent Controversies in Accounting for Operating Leases and Leasehold Improvements
CPA Journal, The › Vol. 75 Nbr. 10, October 2005
Linked as:
Summary
Beginning in Nov 2004, a small number of companies began restating their financial statements due to nonconformity with current lease standards. These restatements accelerated in Feb 2005 after a letter from then-SEC Chief Accountant Donald T. Nicolaisen to the AICPA was published on the SEC's Web site. Consistent with the Statement of Financial Accounting Standard (SFAS) 13, Accounting for Leases, the Office of the Chief Accountant stressed that companies must amortize leasehold improvements over the shorter of the economic life of the leasehold improvements or the lease term. The chief accountant's letter clarifies accepted practice regarding the accounting and reporting requirements for operating leases that include leasehold improvements, rent holidays (or, more generally, nonlevel lease payments), and incentives provided to lessees to partially or fully compensate them for leasehold improvements made to leased properties.
See the full content of this document
Extract
Recent Controversies in Accounting for Operating Leases and Leasehold Improvements
As if the requirements imposed by the Sarbanes-Oxley Act (SOA) and the tough economic climate aren't enough, corporate accountants are being prodded to reexamine their accounting practices with respect to operating leases. Beginning in November 2004, a small number of companies began restating their financial statements due to non...
See the full content of this document
Sponsored links
