Will New Lease Accounting Bring On the Apocalyse?

In Monday's Wall Street Journal, congressmen Brad Sherman and Peter King claim that the proposed changes in Lease accounting will cost 3.3 million jobs. This seems a bit extreme. Furthermore Emily Chasan writes that changes are coming soon.  In a separate article she writes the change could add $2 trillion (yes that is with a "T") to corporate balance sheets and that "adding assets and liabilities for store leases, airplanes and the like could force companies to renegotiate the terms of their loans with lenders. Banks and lenders often require companies to maintain covenants, such as a specific debt-to-equity ratio, fixed-asset ratio or earnings metric, which could all be thrown out of whack by such a significant accounting change"

Is International Accounting In Our Future?

Accountants: start learning a new set of rules! The Securities and Exchange Commission is moving toward using International Accounting Standards rather than U.S. GAAP.


On the front page of yesterday's (August 28, 2008) Wall Street Journal, Kara Scannell and Joanna Slater reported that the SEC has started the ball rolling to move publicly traded U.S. companies from GAAP to international standards.


They explained the timetable "The SEC's proposal would allow some large multinational companies to report earnings according to international accounting beginning in 2010. The SEC estimates at least 110 U.S. companies would qualify based on their market capitalization, among other factors. The agency also laid out a road map by which all U.S. companies would switch to International Financial Reporting Standards, or IFRS, beginning in 2014, at the expense of U.S. Generally Accepted Accounting Principles, the guiding light of accountants for decades."