The Lease Agreement at the Tenant – the Same Transaction, but Different Accounting, with Consequences for the Information Presented in the Financial Statements and the Indicators Calculated Based on Them

Marian Săcărin
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Marian Săcărin: Bucharest University of Economic Studies

CECCAR Business Review, 2023, vol. 4, issue 2, 3-13

Abstract: In our country, the lease agreements are differently accounted at the tenant according to the used accounting reference system. Thus, in the case of entities applying the International Financial Reporting Standards, when the lease agreement is concluded, an asset is recognized in the form of a right of use in association with a debt. During the carrying out of the contract, the right of use is amortized, and the existence of the debt entails, in its turn, recognition of financial expenses and reimbursements. Instead, at the entities applying the accounting regulations compliant with the European directives, only the expenses incurred by the rents and possibly the debts related to the payable instalments provided in the lease agreement are recognized. Consequently, the information in the financial statements is not the same, and the indicators calculated based on them have, in their turn, different values.

Keywords: lease agreement; tenant; accounting; International Financial Reporting Standards; accounting regulations compliant with the European directives; financial statements; indicators (search for similar items in EconPapers)
JEL-codes: K33 M41 M48 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ahd:journl:v:4:y:2023:i:2:p:3-13

DOI: 10.37945/cbr.2023.02.01

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