In depth - IFRS 16 - a new era of lease accounting!

Mar 2016

In January 2016 the International Accounting Standards Board (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.

Contact us

Ian Farrar
China and Hong Kong Corporate Treasury Leader
Tel: +[852] 2289 2313
Email

Shelley So
Partner
Tel: +[852] 2289 2955
Email

Follow us