Advanced Issues in Accounting Report 2022

Running head: ADVANCED ISSUES IN ACCOUNTING
Advanced Issues in Accounting
Name of the Student
Name of the University
Author’s Note

1ADVANCED ISSUES IN ACCOUNTING
Abstract
Introduction of the new accounting standard for lease, AASB 16 Leases, will bring many
changes in lease accounting and reporting of the companies by eliminating the classification
of finance and operating leases. This requires the companies in recognizing right-of-use
assets and lease liabilities in the balance sheet while reporting depreciation expenses of these
assets and interest expenses of these liabilities in the income statement. The main reason for
introducing this new accounting standard for lease is to eliminate the deficiencies in the
former lease standard that did not require the companies in reporting large amount of
operating leases in the balance sheet; as a result, it was not possible to assess the actual
economic reality of the companies.

2ADVANCED ISSUES IN ACCOUNTING
Table of Contents
Introduction................................................................................................................................3
Understanding on Lease Arrangement.......................................................................................3
Issues in the Former Accounting Standard for Lease................................................................3
Leases Currently Listed in the Financial Reports of the Selected Companies..........................4
Harvey Norman......................................................................................................................4
Myer.......................................................................................................................................5
Impact of the New Accounting Standard for Lease on the Selected Companies.......................5
Harvey Norman......................................................................................................................5
Myer.......................................................................................................................................5
Short-term and Long-term impact of Changes to Reporting for Lease.....................................6
Why the New Accounting Standard for Lease may be Unpopular............................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................8