Proposed changes in public sector lease accounting : national and international perspectives.

Abstract

PURPOSE: The purpose of this dissertation is to provide an insight on the proposed changes to lease accounting in the public sector as set out by the IPSASB in Exposure Draft (ED) 64. The study also investigates the perspectives of different constituents with regards to these changes, as well as scrutinises the challenges that the Maltese Treasury Department may face in implementing the changes in the local scenario. DESIGN: The objectives of this study were achieved through a qualitative research approach, involving semi-structured interviews with a Treasury Official and four accounting professionals. As part of the ED’s feedback process, the IPSASB received comment letters, which were then analysed in this study to gain an understanding on the perspectives of the international respondents with regards to the proposed changes to lease accounting. FINDINGS: There was not a consensus amongst the respondents on the proposed changes to lease accounting, mainly with regards to lessor accounting and concessionary leases. In contrast, there was an unanimity between the respondents on the right-of-use model proposed for lessee accounting. In addition, if the changes were to be applied to the Maltese government’s accounting system, the main challenges would be that there is a lack of accounting professionals and the data collection process itself. CONCLUSIONS: From the study it was concluded that even though the IPSASB has not finalised the changes, the Maltese Treasury would still need to assess whether to implement the changes as well as to consider making any tweaks to be applicable to the local scenario. IMPLICATIONS: This study would provide useful information to the IPSAS team within the Treasury Department when it comes to analysing whether the new lease public sector standard would require any modifications to be applicable to the local scenario.