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Effect of Lease Accounting Instruction on Students’ Ability to Classify Lease Transactions in Nigerian Universities

Abstract

Lease accounting instruction is an important component of accounting education because it equips students with the knowledge required to understand, analyze, and appropriately account for lease transactions. Students’ ability to classify lease transactions is essential for determining the appropriate accounting treatment and maintaining accurate financial records. However, students may encounter difficulties distinguishing different types and characteristics of lease arrangements, particularly when presented with practical business situations. This study therefore examines the effect of lease accounting instruction on students’ ability to classify lease transactions in Nigerian universities. Lease accounting instruction involves teaching students the principles, procedures, and accounting requirements associated with lease arrangements. The instruction exposes students to important concepts such as lessors, lessees, lease terms, lease payments, right-of-use assets, and lease liabilities. It also helps students understand the features that distinguish different lease arrangements and provides opportunities to apply accounting principles to practical lease transactions and financial reporting situations. Students’ ability to classify lease transactions refers to their capacity to examine the characteristics of a lease arrangement and correctly determine its appropriate accounting classification. This includes identifying the parties involved, recognizing the nature and terms of the lease, assessing relevant contractual features, and distinguishing different lease arrangements based on established accounting principles. Adequate competence in lease classification is important because appropriate classification provides a foundation for applying the correct accounting treatment to lease transactions. The study will adopt a survey research design. The population will comprise Accounting Education students in selected Nigerian universities. Data will be collected using a structured questionnaire designed to obtain information on lease accounting instruction and students’ ability to classify lease transactions. The instrument will be subjected to appropriate validation and reliability procedures before administration. Data collected will be analyzed using descriptive and inferential statistics, while the hypothesis will be tested at a 0.05 level of significance. The study is expected to establish that lease accounting instruction has a significant positive effect on students’ ability to classify lease transactions. Effective instruction is expected to improve students’ understanding of lease arrangements, relevant accounting concepts, and classification criteria, thereby enhancing their ability to appropriately analyze and classify lease transactions presented in accounting situations. The findings are expected to have important implications for the teaching and learning of advanced financial accounting in Nigerian universities. Accounting lecturers may need to incorporate practical lease scenarios, classification exercises, contractual examples, and case-based activities into classroom instruction. Such approaches may enable students to develop stronger connections between theoretical lease accounting principles and practical business transactions. The study is expected to benefit Accounting Education students, accounting lecturers, university administrators, curriculum developers, and other stakeholders in accounting education. Students may develop stronger practical competence in analyzing lease arrangements, while lecturers may gain useful insights into instructional approaches for improving students’ understanding of lease accounting. Curriculum developers may also use the findings to strengthen lease accounting content and practical activities within accounting education programmes. The study recommends that accounting lecturers should adopt practical and learner-centred approaches when teaching lease accounting. Greater emphasis should be placed on lease classification exercises, practical business scenarios, contractual analysis, and transaction-based assessments. The study concludes that effective lease accounting instruction can improve students’ ability to classify lease transactions and contribute to the development of stronger accounting knowledge and practical competence.

Keywords: Lease Accounting, Lease Transactions, Lease Classification, Accounting Instruction, Financial Accounting, Accounting Education, Lessee Accounting, Lessor Accounting, Lease Arrangements, Lease Terms, Lease Payments, Right-of-Use Assets, Lease Liabilities, Financial Reporting, Accounting Competence