COMPARATIVE LEGAL ANALYSIS OF THE CONSISTENCY BETWEEN CIVIL LAW, TAX AND ACCOUNTING QUALIFICATIONS OF FINANCIAL LEASING

The objectives of this study are focused on a comparative legal analysis of the importance of achieving consistency between the legal, tax and accounting qualifications of financial leasing transactions within the economic and legal system of Bosnia and Herzegovina (B&H), as well as offering an assessment of the potential of transposing different economic-legal concepts and the development of relevant practices based on examples from Germany, England, and the USA. The issue of congruence between civil law and tax qualifications of financial leasing transactions presents a significant challenge in providing consistent answers for national economic systems, both of continental and common law traditions. Furthermore, the civil law qualifications of financial leasing transactions in B&H are not complementary with the qualifications adopted in national and relevant international accounting standards (IAS 17 and FASB 13). Some national accounting frameworks do not recognize leasing capitalization criteria at all, while others wrongly classify most leasing transactions under the treatment for operating leases. This opens up broad opportunities for the development of undesirable practices, such as the disappearance of financial leasing assets from the lessee’s balance sheet, as well as the duplication of leasing assets in the balance sheets of both the lessor and the lessee. The answers to the questions raised in this paper are of multiple importance for achieving a more creative development of the leasing industry in B&H and formulating appropriate proposals for improvements based on the results of the comparative legal analysis of the reference examples from Germany, England and the USA.