Thinking Allowed — The new lease accounting

Published on: 31 Aug, 2016

Earlier this year the IASB released its new IFRS on lease accounting.

The simple headline is that the new Standard will require that what today is an operating lease will be brought onto the balance sheet, as we do with finance leases.

However, the Standard changes some of the thinking behind lease accounting.  This means that the factors that are important in writing a lease agreement today will change. 

This publication explains the new requirements and gives you some tools for assessing how your financial statements are likely to be affected.  It identifies the areas where accounting judgement will be required—mainly around identifying whether you have a lease or a service agreement, or both; renewal options; and determining the discount rate, particularly on property leases. 

Equally importantly, there is quite a bit of choice about how to apply it, and those decisions will be important. 

Although the new requirements will not be mandatory until 2019, the pervasive effect of the changes mean that it is important to start thinking about them sooner rather than later.  

Please click to download Thinking Allowed — The new lease accounting.

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