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Lease Accounting Modification: A qualitative study about how Swedish listed companies are preparing as well as adapting to the proposed amendments in IAS 17 Leases
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
2015 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Background

A common source of financing businesses is through leasing. Currently there are two types of leasing, financial and operating. While financial leases are capitalized similarly to owning an asset, operating leases are completely left out of the balance sheet and as a result related assets and debts are not visible for third party users. Therefore, leasing standards have been criticized for not providing a fair view of a company’s financial positions. Considering this, IASB and FASB are collaborating on a joint project that would require capitalization of all lease contracts, and that was the core in their latest Exposure Draft 2013/6. 

Purpose

This study aims to examine the listed companies on Swedish Stockholm stock exchange in which one way or another deal with operating leases contracts. In particular investigating the Swedish Mid and Small Cap companies’ perceptions regarding this proposal and amendments implied in the ED 2013/6.

Method

A qualitative method with an abductive approach has been used for the purpose of this study. The process of selecting the acquiring information to fulfil that has been mainly collected through the interviews made with representatives from the Swedish Mid and Small Cap companies. The interviews which consisted of semi-structured with an open-ended questions style were performed through telephone between Wednesdays 25th of March 2015 – Tuesday 7th of April 2015.

Conclusions

Considering that the proposed amendments in the IAS 17 Leases are not yet effective and based on the results as well as the analysis from this study it is shown that some of the examined companies are not aware of the ED 2013/6, and therefore not preparing for those requirements in the new ED. Further, the examined companies whom are aware argue that the new ED include to a great extent more administrative work and complicated calculations, thus they would rather avoid the realization of such new standard. In conclusion, the findings indicate that all companies using operating leases will at some extent be affected by the amendments, although most Mid and Small Cap companies will not have a dramatic consequence emerge their balance sheets.

Place, publisher, year, edition, pages
2015. , 53 p.
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-26978ISRN: JU-IHH-FÖA-"-20150042OAI: oai:DiVA.org:hj-26978DiVA: diva2:817513
Subject / course
IHH, Business Administration
Supervisors
Examiners
Available from: 2015-06-30 Created: 2015-06-05 Last updated: 2015-06-30Bibliographically approved

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf