New Accounting Standards Unlikely To Affect Car Leasing Industry
Friday, 10. September 2010
There are new accounting rules being worked on by the International Accountancy Standards Board in order to standardise the way that leases are accounted for. Years ago we made a big issue about the fact that contract hire type leases were ‘off balance sheet’ and simply recorded as a revenue expense. This was quite important for large corporates but for smaller companies it didn’t actually carry a lot of weight and I can’t remember any client that said he wanted to go the contract hire route because it would take the accounting for his car off the balance sheet. So whilst within the industry there have been many rows and disagreements over accounting policy and presentation it should all result in virtually no difference. We haven’t seen the final directive so we aren’t sure whether there will be any impact at all on the rates charged by the contract hire companies to their customers resulting from the changes but like the BVRLA I see very little change to the way that companies fund their cars. By Graham Hill
