Summarized article Example | Topics and Well Written Essays - 500 words - 1

Summarized - Article Example These events are mentioned by the author as an anecdotal introduction to understanding the potential changes in international finance in the near future. This paper will offer a summary of the article highlighting the main ideas presented by the author (Forsyth). The author of this article describes how quantitative bond easing is likely to affect the interest rates in different regions. The author mentions the outstanding roles of the federal reserves in creating a balance of situations and eliminating concerns on the fear gauge. China, for example, has declared a lowered bank reserve requirement while the bank of England will follow suit soon. This will happen after America announces its trimming of monthly purchases of bonds. The author places emphasis on the critical role held by the US in the global financial scene. This is specifically because of the dollar, which has been used as a reserve for global currencies since the 1920s. In the past, there has been evidence that the US makes use of its â€Å"exorbitant† privileges and eventually exploits other nations. This is because the dollar still remains the center of global currency. It is both a reserve in store houses that serve other central banks and the primary currency used i n finance and trade internationally (Forsyth). The globe also relies on the dollar as the effective media when indulging I transactions and investments. The dollar has also been described as having made America’s banking and financial system very liquid and deep. Therefore, since only the US can produce the much needed dollars that control the global finances, it enjoys an exorbitant privilege. As the author outlines, there are the implications of such a privilege. An evident one is the fact that, the US can print dollars and use such in exchange for goods produced in other regions. The US can also indulge in cheap borrowing because borrowing is done in the currency it produces. Other

The current debate and developments in accounting for leases for Essay

The current debate and developments in accounting for leases for lessees - Essay Example This report provides the discussion regarding the reasons behind aforesaid changes in standards. Maintaining focus from the lessee point of view, this report puts together the new proposal for lessees regarding the ‘right to use’ model. Moreover, it will discuss the impact of proposed changes on the companies worldwide using international standards in the preparation of their financial statements. INTRODUCTION Lease is essentially a form of rental agreement where the owner (lessor) receives rentals from lessee. Corresponding to mentioned rentals, lessee gains right to use the assets (EZ Technical, 2009). Lease is a major source of finance for business and to give the correct picture of business, it must provide the source of this important information in the financial statement (Roberts, Weetman, Gordon, 2008). Currently, lease under operating category does not provide this information (Melville, 2011). Therefore, to ensure the financial statements represent lease transa ctions in harmony with commercial essence and not in according to the legal form only, International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) proposed new approach to lease accounting (Cotter, 2012). ... Hence, factors determining lease as finance lease are further mentioned below (Kelly and Kelly, 2009): The ownership of the asset is finally transferred to the lessee at the end of agreement term. Risks such as cost of maintenance, obsolescence due to technological advancement etc are all transferred to lessee. Rewards pertaining to right on profit from the usage of asset as well as gaining benefit for its whole useful life are transferred to lessee. The lessee can purchase the asset at a price notably below than its fair value. Or it has right to extend the lease for secondary term at rent considerably below market value. The major portion of useful life or the economic life of assets is accounted in lease term. Usually 75% of asset life is accounted in term. At the time of lease agreement, present value of the minimum lease payments represent the substantial fair value of the leased asset. In case of cancellation of agreement the charges are to be borne by lessee. In the light of t hese factors, agreement can be defined as finance. In case of the lease agreement does not account for the discussed conditions it shall be then regarded as operating lease. PROPOSED STANDARD- EXPOSURE DRAFT ED/2010/9 LEASES International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) on 17 August 2010 published proposal Exposure Draft ED/2010/9 Leases (Hales, Venkataraman, and Wilks, 2012). This draft suggested new approach to lease accounting for lessees and lessor. The new draft suggested replacement of IAS 17 and change in accounting treatment of lease considerably (Eames, 2011). Specific to lessee, ED/2010/9 Leases proposes â€Å"right of use† model where the lessee would