In January 2016, the International Accounting Standards Board (IASB) issued IFRS 16 ‘Leasing’, which represents the first major overhaul in lease accounting for over 30 years.
The Standard brings fundamental changes to lease accounting that replace previous accounting that is considered no longer fit for purpose. These changes become effective from 1 January 2019.
IFRS 16 will affect most companies involved in leasing that report under International Financial reporting Standards (IFRS). It will have a substantial impact on the financial statements of lessees of property and high value equipment – requiring that leases be placed on-balance sheet by recognising a ‘right-of-use’ asset and a lease liability.
Our Insights into IFRS 16 series summaries key areas of the Standard and aims to assist you in preparing for the changes that you will need to make.