Professor On Lease-Accounting Rules Rewrite: 'It's About Time'
The Financial Accounting Standards Board today is expected to announce that it's going to begin a restructuring of its standards for lease accounting.
Professor On Lease-Accounting Rules Rewrite: 'It's About Time'
UNIVERSITY PARK, PA (July 19, 2006)—The Financial Accounting Standards Board today is expected to announce that it's going to begin a restructuring of its standards for lease accounting.
J. Edward Ketz, associate professor of accounting at Penn State's Smeal College of Business, argues that the current rules mislead lay investors and applauds the FASB for finally beginning an overhaul.
"The current FASB rules allow corporations to make believe that significant assets and liabilities don't exist," Ketz says. "In fact, several corporations have $10 to $15 billion of off-balance sheet lease liabilities. To the inexpert investor, these hidden liabilities can seriously affect the perceived financial well-being of a corporation, influencing the decision to invest on false pretenses.
"It's about time that the FASB rewrites these rules that essentially let corporations hide trillions of dollars of debt from American investors."
REPORTERS & EDITORS: For more information, please contact Wyatt DuBois in the Smeal College of Business Media Relations Office at 814-863-3798 or wed112@psu.edu.
Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the Center for Digital Transformation, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.
