Ready for IFRS 16? The new accounting standard for leases
IFRS 16 Leases represents a fundamental change in the accounting for leases on the part of lessees. Leases which were once treated “off-balance” as operating leases are now required to be recognised on-balance, resulting in enormous impacts on financial figures.
Lessees are now required to recognise right-of-use assets from leases on their balance sheet and recognise future payment obligations as a liability. This means that not only will the balance sheet change significantly but so will key indicators of many companies – particularly those that have large numbers of leased assets.
IFRS 16 replaces the following standards and interpretations:
- IAS 17 Leases
- IFRIC 4 Determining whether an Arrangement contains a Lease
- SIC-15 Operating Leases – Incentives
- SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease
Contents of this whitepaper:
- Objective of IFRS 16
- The fundamental changes
- Accounting by lessees
- Consequences of IFRS 16 for lessees
- Your flexible solution for IFRS 16