BDO Need To Know: IFRS 16 Leases

BDO is glad to present its latest Need to Know publication, IFRS 16 Leases.

IFRS 16 Leases brings significant changes in accounting requirements for lease accounting, primarily for lessees. It has been developed by the International Accounting Standards Board (IASB) to replace the existing suite of standards and interpretations on leases:

– IAS 17 Leases
– IFRIC 4 Determining whether an Arrangement contains a Lease
– SIC 15 Operating Leases – Incentives
– SIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

The IASB completed IFRS 16 in January 2016 by publishing a final standard, with significant modifications from the 2013 Exposure Draft (‘ED’).

This Need to Know sets out the final requirements in relation to the classification and measurement of leases from the perspective of lessees and lessors and compares those requirements to the previous standards, primarily IAS 17. It should be noted that the guidance relating to lessor accounting remains largely unchanged from IAS 17, therefore, the focus of this publication primarily relates to lessees, who are more broadly affected.