Latest Hardcat News - 27 March, 2017

IFRS 16 is Covered: Comply with new Standards for Controlling Leased Assets

IFRS 16 is Covered: Comply with new Standards for Controlling Leased Assets

There are new International Financial Reporting Standards (IFRS) that take effect from accounting
periods beginning on or after 1 January 2019. This new accounting standard will have a substantial impact on the financial statement processes of lessees around the globe.

In short, the standard requires any company that reports under IFRS to account for leases on their balance sheet by recognising the right-of- use of the asset and lease liability. Analysts concur that this will have a particularly significant impact on financial statements of lessees where property and high value equipment are concerned.

Impact on leases:

  • All leases will be accounted for on balance sheet as opposed to simply expensing periodically.
  • Leases for right-of- use assets will in effect be treated similarly to a purchased asset and depreciated/amortised.

← Back to all news