Among other requirements, IFRS 16 required that most leases be capitalized and recorded on the balance sheet, changed how they’re reported, and eliminated most operating (non-capitalized) leases… The objective of this improvement is to remove the potential for confusion by amending Illustrative Example 13, to remove the illustration of the reimbursement of leasehold improvements by the lessor. 1 IFRS 16, Leases, issued January 2016; and ASC 842 issued as ASU 2016-02, Leases (Topic 842), in February 2016 2 IAS 17, Leases Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. 2.8 Can the election to apply the practical expedient be made on a lease-by-lease basis? 1-2) Scope (paras. New standard The IASB has published IFRS 16 – the new leases standard. Read more Leases are recognized, measured and presented in line with IFRS 16 ‘Leases’. Under IFRS 16 Leases, rent concessions often meet the definition of a lease modification. IFRS 16 Thematic Review (September 2020) Executive summary Descriptions of judgements made by management in the application of the company’s accounting policy were absent or inadequate. For the accounting of leases in the books of lessors, IAS 17, the previous standard on leases… IFRS Answer 013 Very good question because let’s face it – the new standard IFRS 16 brings the lessees a few complication with so-called operating leases. After that IAS 17 will no longer be applicable. As a result, some contracts that do not contain a lease today will meet the definition of a lease under IFRS 16, and vice versa. Accounting by the lessee The Group implemented a single accounting model, requiring lessees to recognize assets and liabilities for all leases excluding exceptions listed in the standard. A lease exists in IFRS 16 when a lessee has the right to use an asset for a period of time in exchange for consideration. SCOPE The scope of IFRS 16 is broadly similar to IAS 17 in that it applies to contracts meeting the definition of a lease (see Section 3. 2.9 How does a lessee account for a rent concession if it does not elect to apply the practical 2.10 3. BDO takes a closer look at short-term leases under IFRS 16. 2 | IFRS 16 Leases This fact sheet is based on existing requirements as at 16 January 2017 and does not take into account recent standards and interpretations that have been issued but are not yet effective. IFRS 16 Leases fundamentally changes the financial reporting landscape for how lessees account for operating leases. It comes into effect on 1 January 2019. IFRS 16 is business as usual for lessors, but creates complexity in subleasing arrangements In the May 2018 edition of Accounting Alert we noted that IFRS 16 Leases (“IFRS 16”), which comes into effect for financial reporting periods beginning on or after 1 January 2019, will fundamentally change the manner in which lessees account for leases. In the transaction described in the request, the seller-lessee could determine the proportion by comparing, for example, (a) the present value of expected The IASB and the US national standard-setter, the Financial Accounting Standards Board (FASB), have been working jointly to SALE AND LEASEBACK TRANSACTIONS IE11 Example 24—Sale and leaseback transaction APPENDIX AMENDMENTS TO GUIDANCE ON OTHER STANDARDS IFRS 16 LEASES—JANUARY 2016 IFRS Foundation 4 6. IFRS 16 Leases requires lessees to recognise new assets and liabilities under an on-balance sheet accounting model that is similar to current finance lease accounting. 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