The IASB and FASB Stumble Over the Annuity Method of Depreciation

Accounting in Europe, Vol. 11, No. 1

5 Pages Posted: 17 Sep 2013

See all articles by Stephen A. Zeff

Stephen A. Zeff

Rice University - Jesse H. Jones Graduate School of Business

Date Written: September 16, 2013

Abstract

Even though the IASB and the FASB avowed that they would not use the annuity method of depreciation in their leases exposure draft of May 2013, they did so anyway, and with stealth. This article discusses and illustrates the annuity method of depreciation and then critically assesses how the IASB and the FASB have tried to defend their Type B lease treatment as involving a "plug figure" and not as an application of the annuity method, which it is.

Keywords: leases, depreciation

JEL Classification: M41

Suggested Citation

Zeff, Stephen A., The IASB and FASB Stumble Over the Annuity Method of Depreciation (September 16, 2013). Accounting in Europe, Vol. 11, No. 1. Available at SSRN: https://ssrn.com/abstract=2326493

Stephen A. Zeff (Contact Author)

Rice University - Jesse H. Jones Graduate School of Business ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005
United States
713-348-6066 (Phone)
713-348-6296 (Fax)

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