Accounting chief says leases reform in danger
(Reuters) - Corporate lobbying is on the verge of derailing an attempt by regulators to make companies account more clearly for leased equipment, the head of a global accounting rules body said on Tuesday.
The International Accounting Standards Board and its U.S. counterpart, the Financial Accounting Standards Board, agreed in June to require companies to put leases longer than a year on their balance sheets.
The aim is to give investors a clearer picture of financial exposures as firms lease much of the equipment they use to run their business, from airplanes to photocopiers.
Currently the costs, estimated at over $1 trillion (624 billion pounds) globally, are tucked away in disclosures, but companies fear investors will take fright at swollen balance sheets which could raise borrowing costs.
http://uk.reuters.com/article/2012/11/06/uk-accounting-leases-idUKBRE8A516I20121106
In a nutshell : finance leases are on balance sheet and operating leases are off balance sheet. Currently operating leases are generally shown as long term creditors.