Participation Request Academic Lease Survey

The IASB and FASB are currently developing a new standard for accounting for lease and rental contracts¹. A joint Discussion Paper setting out the Boards’ thinking on accounting for leases and rentals was published in March 2009 and an Exposure Draft Standard is expected in June 2010. These changes will have a significant impact on the preparers of accounts and on their financial statements, particularly as almost every business makes use of leasing or rental arrangements in some form or another, whether it be for large assets such as property or manufacturing equipment or for other lower value items such as cars, forklifts, IT & hardware and office or telecom equipment.

Prior research (Benchmark study for leasing) conducted by the Rotterdam School of Management, Erasmus University (RSM) and PwC has been aimed at quantifying some of the impacts the changes to existing accounting requirements will bring. Using data from publicly available sources, this research considered the effects of the new proposals on the financial ratios of approximately 3,000 companies worldwide. The findings were that companies’ leverage would increase by an average of 58%. However, the actual impact may be even higher in practice, as the research was only able to factor into the analysis public information disclosed in the notes to companies’ accounts.

Consequently, RSM and PwC are launching a second study that aims to further quantify the impacts of the new lease and rental accounting proposals using data that cannot be obtained from public sources. We are therefore inviting over 1,000 listed European companies to participate in this survey and would be extremely grateful for your cooperation. We stress that any and all information provided in this survey will remain wholly confidential. It will be aggregated, on an anonymous basis, with that of all the participants solely for the purposes of providing aggregated information of the survey results.

In addition to not taking too much time, we believe that it will also be a beneficial exercise for your company in terms of preparing for the implementation of the new standard³ by providing you with additional insights into the proposed new standard, your current use of leasing and rental, and how this may be affected by the new accounting guidance.

The survey will be conducted online and instructions as to how to access the web-based form and a link will be forwarded to you or to your investor relations contact in the next few days. If you would like us to forward the online survey directly to another person responsible for completing this survey, we kindly ask you to complete the online form. We will ensure that the survey link is forwarded to the person designated by you in this form. As indicated, survey responses will be processed confidentially and anonymously.