Accounting and corporate reporting
PwC guidance
IFRS 16 – A new era of lease accounting - PwC In depth
In January 2016 the IASB issued IFRS 16, ‘Leases’, and thereby started a new era of lease accounting – at least for lessees. Whereas, under the previous guidance in IAS 17, 'Leases',
a lessee had to make a distinction between a finance lease (on balance
sheet) and an operating lease (off balance sheet), the new model
requires the lessee to recognise almost all lease contracts on the
balance sheet; the only optional exemptions are for certain short-term
leases and leases of low-value assets. For lessees that have entered
into contracts classified as operating leases under IAS 17, this could
have a huge impact on the financial statements.
This In depth
provides a summary of IFRS 16 and the main differences between IFRS 16
and the expected new guidance in US GAAP are included in the Appendix.
IFRS 16, 'Leases' - Implications for retail and consumer and real estate - PwC In the Spotlight
The new lease accounting
standard will fundamentally change the accounting for lease
transactions and is likely to have significant business implications.
Almost all leases will be recognised on the balance sheet, with a right
of use asset and financial liability. The amortisation of the right of
use asset and the accretion of interest on the financial liability
will likely result in recognising higher expenses in profit or loss
during the earlier life of a lease. Impacts on the Retail and consumer
and Real estate industries are summarised in the following 'In the
Spotlights':
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