This special publication from the Financial Reporting Faculty looks at the IASB's new leases standards. Delegates for the joint ICAEW and IFRS Foundation virtual conference, taking place on 10 October, can download a copy of this report.
IFRS 16: putting theory into practice
Welcome to our new hub containing a suite of resources covering IFRS 16, which sets out the principles that both lessees and lessors apply to provide relevant information about leases. This hub contains a range of articles and extracts from various sources, including a new IFRS 16 Leases report published by the Financial Reporting Faculty exploring the IASB's new leases standard.
Introduction by Nigel Sleigh-Johnson FCA, Head of Financial Reporting Faculty, ICAEW
The publication of IFRS 16 Leases finally brought to a close a debate that had lasted for a generation. The age-old distinction in international standards between finance leases and operating leases is no more, meaning that, for the first time, almost all leases will appear on the balance sheet of the lessee. The new standard – which is effective for accounting periods beginning on or after 1 January 2019 – is intended to improve both comparability and transparency by providing users with a more complete and understandable picture of an entity’s leasing obligations. The effect of the new standard will, of course, vary between individual companies, sectors and even geographical regions. The impact is likely to be most pronounced in those business sectors – such as transportation, real estate, mining and construction – where there are currently a significant number of material off-balance sheet leases. Companies with significant leased premises – such as retailers – will be similarly affected. But whatever sector your business operates in, it is likely that implementing the new standard will present a formidable logistical challenge.
Dr Nigel Sleigh-Johnson FCA
Head of Financial Reporting Faculty, ICAEW
IFRS 16 prescribes a single lessee accounting model that requires the recognition of asset and corresponding liability for most leases.
The Financial Reporting Faculty answers your initial questions on the IASB’s new leases standard.
This report, Audit insights retails - are you ready for a radical change, helps retailers and external users of accounts to understand some of the important issues that need to be addressed as the standard is implemented.
View upcoming events from the Financial Reporting Faculty.
Find articles, books and online resources providing quick links to the standard, summaries, guidance and news of recent developments.