Adopting IFRS 16 – Leases

Let’s be honest, for most accountants (and accounting faculty) applying (preparing lectures for) new accounting standards can be a nightmare, particularly for new accounting standards that significantly amend or revise existing guidance.  IFRS 16 Leases (and its U.S. counterpart, ASU 2016-02 Leases, which was issued by the FASB ) does just that, it completely replaces IAS 17 (similarly, ASU 2016-02 replaces the existing U.S. leasing guidance commonly referred to as FASB 13 or ASC 842).

Almost right after issuing IAS 17, IASB started working on its revision. During its deliberations, the IASB issued several discussion papers and expsoure drafts.  Throughout that process, they discussed the basic notion contained in IFRS 16, that the leasee should capitalize a lease as a “right of use asset.”   Therefore, most accountants expected that the new guidance would significantly change the existing leasing model.

Of course, knowing that changes are coming is not the same as understanding and being able to adopt/apply those changes. And, that’s where we are today.

Well, for those looking for a good overview of the new leasing guidance, I recommend  “IFRS 16 Leases Webinar,” a video posted on the KPMG Austalia YouTube website.  It’s about 1 hour long and in it, the presenters summarize the new guidance in a clear and concise manner.  Additionally, they use excellent PowerPoint slide illustrations summarizing their comments.

When viewing the KPMG video, you will note that YouTube recommends some related videos.  One of those, the video “Leasing and other reporting matters,” posted on the Deloitte Canada YouTube website, is also excellent.

 

 

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About docjonz

I am an Associate Professor of accounting at Hofstra University in Hempstead, NY. Additionally, I have more than 30 years of professional accounting experience in various capacities including auditing, accounting standard setting and corporate accounting policy.
This entry was posted in Accountant, Auditing and Auditor Reporting, Financial Accounting, IFRS and tagged , , . Bookmark the permalink.

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