So says Leaseurope after a survey of around 125 European IFRS preparers, conducted by PwC in cooperation with the Erasmus University (NL), found that the move by the IASB and FASB to revise lessee and lessor accounting will have significant impacts on firms, including on costs.

In addition to financial statement impacts, responding firms expect to have to adapt their budgeting, IT systems and business and finance processes, amongst others, to be able to meet the new requirements. More than 70% of respondents said that they considered that the costs of implementing the requirements in their current form would outweigh any benefits they might bring in terms of improved information for the users of accounts.

The study also pinpoints two particular areas of the proposals, accounting for lease renewal options and rentals payments based on a variable factor (known as contingent rentals), as being amongst the main source of complexity for preparers of accounts.

Mark Venus (BNP Paribas), chair of Leaseurope's Accounting Committee, said: 'While companies with property leases will see the largest impacts on their financial statements, let's not forget that many businesses have tens of thousands of smaller contracts providing them with the ability to use basic IT & office equipment, cars and the like, spread throughout their operations. The efforts involved in identifying these low-value contracts and collating the necessary data to report under the new requirements will be tremendous.

'With the average equipment lease contract in Europe being worth just €27,000, companies preparing accounts under IFRS will surely be wondering whether changes to accounting that are this far reaching are worthwhile at all.'