The new standards for accounting for leases under IFRS and US GAAP have similar objectives but seek to accomplish those objectives in different ways. The new IFRS standard classifies all leases into one category whereas the new US GAAP standard retains two categories into which leases can be classified. The new US GAAP standard retains its specific guidance for classifying leases. Both new standards require that the assets and liabilities related to all leases (except for those specifically excluded in the standards) be reported on the balance sheet.
Your paper should compare the two new standards and then provide a critique of the new standards. In areas where the standards are the same, you may want to express your views about whether or not that specific part of the standards will result in high-quality financial reporting. Explaining the reasons for your views is particularly important. In areas where the standards are different, you may want to express your opinion about which will result in better financial reporting—and then explain why you have that opinion.
You should feel free to look for research or professional articles that relate to the two lease standards and use them to inform your evaluation. Any articles referenced should be appropriately cited at the end of your paper.
In order to fully understand the US GAAP standard for accounting for leases, you will need to refer to the Accounting Standards Codification (ASC). You can access that database using the following username and password: Username is AAA52059; Password is d5JkF4G. You will also need to set up an account (no cost) on the IFRS website (ifrs.org) so you will have access to IFRS 16, the IFRS standard for accounting for leases.
