This edition of New on the Horizon looks at the potential impact of the revised lease accounting proposals and highlights the issues relevant to banks.
- Lease accounting proposals may have a significant impact on banks’ compliance with capital and other regulatory requirements.
- Proposed dual model and new lease classification test may impede comparability.
- Proposals may affect the covenant arrangements of customers with significant lease commitments.
- Exclusion of some sale and leaseback transactions from lease proposals could increase volatility in profit or loss.