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Exposure Draft on Lease Assignment Sample

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Exposure Draft on Lease Assignment Sample

The aim of making an exposure draft by International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) is to improve the quality as well as comparability of financial statements and to develop a standard that is able to establish principles that lessors and lessees shall apply so that useful information to users of financial statements can be reported. The information to be used is about timing, amount and uncertainty of cash flows that can arise from a lease. The reporting principle of leases in exposure draft is that an entity should recognize assets and liabilities that arise from a lease (Exposure Draft, 2013). The recognition, presentation as well as measurement of cash flows and expenses that arise from a lease by a lessee would depend on whether lessee is expected to consume more than an insignificant portion of the economic benefits that are embedded in an underlying asset.

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