ACCA's Global Forum for Corporate Reporting has criticised the proposed changes in accounting for operating leases put forward by the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) as creating additional complexity without delivering any improvements.

The comments came in ACCA's response to the most recent exposure draft which includes the introduction of the Right of Use methodology which says that all leased tangible assets should go on the balance sheet of the lessee company, at an amount representing the ability to use them during the lease term.

ACCA says that this model would make accounting more complex and time consuming, but to little or no benefit to anyone involved. Instead, the institute wants to see the existing IAS 17 model updated, claiming that this offers a much simpler and easier to understand approach.

Richard Martin, ACCA's head of corporate reporting, said: 'It is now time to move away from trying to incorporate the Right of Use methodology, and instead have a debate about how to improve the current IAS 17 system, such as through strengthening disclosures, and changing the threshold for recognising a finance lease.'

ACCA says it also supports straightforward treatments of lease terms and renewal options, in a bid to create more transparency and useful information about the assets in the financial statements of lessors and lessees.

Martin said: 'Intangible assets are as much of importance as tangible ones, so continuing to exclude these from the proposed standard is not a helpful move by the IASB, and we have been making this point since the previous exposure draft that was issued by the IASB in 2010. The reasoning behind the exclusion is not entirely clear.'