Impacts on the financials of Compass Group Essay

Impacts on the financials of Compass Group - Essay Example Such is the information that is normally available to many users of the statements and the entire statement. The information is considered insufficient hence a recommendation that the adjustments be made repeatedly and even severally while measuring the same amount. This results in uniformity and quality decisions being made, in the process the populace would be in the position of rationalizing their information (Bell 2000). Â   Â   Â  Secondly, it is argued that enhancing disclosure is never enough given enough consideration and those boards of most companies think and take such disclosures in a manner that it does not appear a substitute. The ED proposes that corporations report assets and liabilities as the failure to report or make such disclosures. The proposals further demand that the leased assets and liabilities always be computed and measured on a discounted basis. The proposals require under this ED that the lessee reports all the assets and liabilities of an aggregate of the leases that have existed for a period of not less than 12 months in the balance sheet. This has the impact of a faithful representation of the lessee’s financial position (Fields 2002). In addition to such disclosures, there is an enhancement of transparency concerning the leverage of the lessee. Â   Â   Â   Â   The ED proposals demand that leases be classified as either Type A or Type B leases depending on whether they are a property such as land and building and land or the leases are other than property such as equipment, aircraft, cars or tracks. For Type A leases, the right of use of the asset and the lease liability is recognized and the unwinding of the discount will be recognized separately from the amortization of the right to use. Type B leases, on the other hand, are recognized as Type B with a difference being on the recognition of the unwinding of the discount which is recognized as a single lease cost (Walton 2009).