Financial Accounting

Summary

According to the present lease accounting standard, a specific lease contract is treated as a purchase of the leased property. In this logic, that is based on the comparability of the leasing and purchasing, the property is recognized as an asset. However, from the viewpoint of the leasing itself, considering the essence of the lease as a purchase of the contractual right and treated as such, the right-to-use-property would be recognized as an asset. The author of this book argues that the right-to-use-property is in conformity with the concept of an asset for the accounting purposes, and discusses an applicable extension of its logic.