Lease Amendment Letter for Employees

This assignment presents a lease amendment letter to be sent to employees at ABC Company. The letter explains the recent changes in lease accounting standards (IAS 17) by the International Accounting Standards Board (IASB). It highlights the key amendments, such as the classification of leases and the recognition of lease liabilities and assets on the balance sheet. The letter also emphasizes the importance of these changes for financial reporting and transparency.

Lease amendment Letter

ABC organization and consultancy
391, Melbourne, Australian SA-5066
Telephone- +8124649
Web- WWW. ABC organization and consultancy.com.au
18th September, 2017
To all the employees and staff members
391, Melbourne, Australian SA-5066
It is to inform all the employees and staff members that there are several changes and
amendments which have been introduced by the IASB authorities in lease rules and regulations.
Lease contract and particular changes as per the Amendment in IAS-17 and AASB-117
There are various changes which are issued by IASB with a view to increase the effectiveness of
financial lease.
Changes in Classification of lease
 Changes in determining the value of lease in recording (Minimum of lease payment or fair
value)
 Classification of lease depends upon the inception of lease.
 Adoption of new principles.

Other changes applied on lease rules and regulation.
Depreciation charged on the assets and depreciation policies adopted by organization should
have leaser time than lease time.
Operating lease, all the expenses and amount paid should be charged from the profit and loss
accounts of company.
Finance lease as per the newly introduced IAS-17 has been bifurcated into two following parts
such as operating and financial lease.
Newly amended lease rules and regulations as per the IAS-17 and AASB-117
Property and other fixed assets will be accounted for the lease from the time of right of use. In
Order to evaluate the lease financial metrics, there are several measures such as gearing ratio,
Assets turnover and EBITDA
Off balance sheet liabilities’
Accounting terms and impacts a company’s level of debts and liabilities which are contingent
and not shown in the liabilities.
Influences and difficulties faced by clients after adoption of New AASB-17
Change the all conditions and requirement of lease agreements and recording of same in
Organization.

AASB-117 will result to non-recording of contingent liabilities
Considering the entire lease amount as capital lease will also increase the capital expenditure and
increase the tax burden of company and profit as well.
Firm should deal with these levels of changes in lease IAS-17 and AASB-117
 Establish harmonization in IFRS and GAAP rules
 Company should add this information’s in its notes to accounts and circulating attached
appendix to its stakeholders along with its annual report.
Key points to follow
 Recording and disclosure of lease agreement in company should be done on the basis of newly
introduced amendment in AASB-117
Your sincerely
Accountant and internal auditors

Bibliography
Chand, P., & Cummings, L. (2008). The Political and Unstable Nature of the IASB's ‘Stable
Platform’: Post‐Convergence Australian Experience. Australian Accounting
Review, 18(3), 175-184.
Accounting, A., Part, B., & Plans, D. B. (2015). Notes to the financial statements.
Council, K. I. (2014). Annual Report 2015-2016.
Xu, W., Xu, W., Davidson, R. A., Davidson, R. A., Cheong, C. S., & Cheong, C. S. (2017).
Converting financial statements: operating to capitalised leases. Pacific Accounting
Review, 29(1), 34-54.
Tan‐Kantor, A., Abbott, M., & Jubb, C. (2017). Accounting Choice and Theory in Crisis: The
Case of the Victorian Desalination Plant. Australian Accounting Review.
Holland, D. (2016). Simplifying income recognition for not-for-profit entities. Governance
Directions, 68(11), 666.
Knubley, R. (2010). Proposed changes to lease accounting. Journal of Property Investment &
Finance, 28(5), 322-327.
Chand, P., & Cummings, L. (2008). The Political and Unstable Nature of the IASB's ‘Stable
Platform’: Post‐Convergence Australian Experience. Australian Accounting
Review, 18(3), 175-184.
Accounting, A., Part, B., & Plans, D. B. (2015). Notes to the financial statements.

Council, K. I. (2014). Annual Report 2015-2016.
Xu, W., Xu, W., Davidson, R. A., Davidson, R. A., Cheong, C. S., & Cheong, C. S. (2017).
Converting financial statements: operating to capitalised leases. Pacific Accounting
Review, 29(1), 34-54.
Tan‐Kantor, A., Abbott, M., & Jubb, C. (2017). Accounting Choice and Theory in Crisis: The
Case of the Victorian Desalination Plant. Australian Accounting Review.
Holland, D. (2016). Simplifying income recognition for not-for-profit entities. Governance
Directions, 68(11), 666.
Knubley, R. (2010). Proposed changes to lease accounting. Journal of Property Investment &
Finance, 28(5), 322-327.