The new rules on leases being proposed by the International Accounting Standards Board (IASB) will have a noticeable effect on the way in which business is conducted, the Royal Institution of Chartered Surveyors (RICS) in Oceania has noted. According to the organisation, the Australian Accounting Standards Board is expected to introduce the new regulations if they are approved by the IASB.
Kaye Herald, managing director of RICS Asia Pacific, commented: "The new proposed lease accounting rules will significantly shift how the corporate sector operates in Australia and will directly affect the balance sheets of many of Australia's occupiers and landlords." The regulations will require companies that report under the International Financial Reporting Standards to account for leases, while lease obligations will have to be included on the balance sheets of many major corporations.
The IASB is working in conjunction with the Financial Accounting Standards Board in the US to develop the rules. The organisations intend to put forward "a new single approach" to lease accounting. The initial discussion paper was published in 2009, with a second draft made available in 2010. In July this year, the bodies announced that the industry will have an opportunity to comment on its revised proposals.