IFRS 16 Leases Breakfast Briefing Deloitte Financial Reporting Advisory

Size: px
Start display at page:

Download "IFRS 16 Leases Breakfast Briefing Deloitte Financial Reporting Advisory"

Transcription

1 IFRS 16 Leases Breakfast Briefing Deloitte Financial Reporting Advisory

2 Introduction & Agenda Session # Topic Sub-Topic 1 Overview of IFRS 16 - Introduction - Definition of a lease - Measurement of asset and liability - Transition - Disclosure 2 Practical challenges - Discount rates - Data collation 3 Project Planning 4 U.S. GAAP versus IFRS 16 - IFRS 16 Project Planning - U.S. GAAP versus IFRS 16 5 Plan update - How is your plan progressing?

3 Overview of IFRS 16 Leases 3

4 Introduction 4

5 Highlights Effective for periods commencing on or after 1 January 2019 Shift in leasing principles IAS 17 Risk and rewards model IFRS 16 Control model IFRS 16 key change for lessees The finance lease/operating lease distinction under IAS 17 is no longer relevant under IFRS 16 for lessees. Instead, most leases will have to be recognised as right-of-use asset with a related liability, with subsequent accounting similar to the finance lease model under IAS 17. 5

6 Key Highlights Majority of operating leases on balance sheet Assets: Right-of-Use Asset Liabilities: Financing Significant impact on income statement & KPIs Finance costs Operating costs EBITDA Example KPIs Impacted: Gearing Ratio Asset turnover Current ratio 6

7 Definition of a lease 7

8 Definition of a lease - overview On transition can make policy choice whether to grandfather previous conclusions as to whether existing contracts are leases. Identified asset May be implicitly or explicitly specified. Is the asset physically distinct? If a capacity portion is it substantially all of the capacity? Supplier s substitution rights may mean no identified asset. No identified asset if supplier has both: Leases vs. service contracts The Now practical matters ability more whether to substitute something alternative is a lease or assets a throughout service the contract. period of use; and Identified asset Leases vs. service contracts Control: Right to direct use Control: Right to obtain benefit Control: Right to direct use Does the customer have the right to direct how and for what purpose the asset is used throughout the period of use? Relevant decisions may be type, when, where, whether output is produced. Decisions may be predetermined. Control: Right to obtain benefit Lessee has the right to obtain substantially all the economic benefits from that use over the life of the lease (rather than over the life of the asset). They would economically benefit from substitution. Lease and non-lease components Lease and non-lease components Expect to separate on basis of standalone prices but can choose not to. Definition of a lease 8

9 Illustrative examples Question: Is it a lease or a service contract? Background A manufacturing company, ProduceCo (the Hirer ), enters into a contract with a freight carrier, Transport Solutions (the Owner ), to transport goods on its behalf. Transport Solutions provides the truck and the driver to deliver the goods. This agreement is for a period of five years and the truck shall remain the exclusive property of Transport Solutions. The Hirer shall be entitled to make all relevant decisions regarding the use of the truck, including when the truck is in use, where it is used, and what goods it is used to transport. When not in use the truck may be kept at either the Hirer or the Owners premises. The Owner shall not be entitled to substitute the truck for a similar asset during the Lease Term. The Owner shall not be entitled to take possession of the truck during the Lease Term, unless the Hirer defaults on at least two consecutive payments. At the expiration of the Lease Term, the Hirer shall surrender the truck to the Owner by delivering the truck to the Owner or the Owner s agent in good condition and working order, (ordinary wear and tear is expected), as it was at the commencement of the Agreement. The Hirer shall pay 50,000 quarterly to the Owner, commencing on July 1, 2019 for the period of the Lease Term. 1. EQUIPMENT The Owner leases to the Hirer the following equipment Qty Manufacturer Model Description Unique ID New Not new Retained number 1 SteelWorks RC-08 Rail Truck car RC Y 1 SteelWorks RC-08 Rail Truck car RC Y 1 SteelWorks RC-08 Rail Truck car RC Y 9

10 Illustrative examples Solution: Is it a lease or a service contract? ProductCo has the right to control the truck identified in the contract, because: It has exclusive use of the truck, which gives it the right to obtain substantially all of the economic benefits from use of the identified assets. It has the right to determine how the truck is used at all points during the lease term meaning it has the right to direct the use of the identified asset. It is a lease! 10

11 Illustrative examples Question: Is it a lease or a service contract? Background Lets look at a different contract, for the use of the truck between Transport Solutions and another customer, ManuCo Inc. The contract between ManuCo and Transport Solutions requires Transport Solutions to transport a specified quantity of goods by using a specified type of truck in accordance with a stated timetable for a period of five years. The timetable and quantity of goods specified are equivalent to ManuCo having the use of the truck for five years. Transport Solutions provides the truck, drivers and engine as part of the contract. The contract states the nature and quantity of the goods to be transported and the type of truck to be used to transport the goods. Transport Solutions has a large pool of similar trucks that can be used to fulfil the requirements of the contract. Similarly, Transport Solutions can choose to use any one of a number of engines to fulfill each of ManuCo s requests and each engine could be used to transport not only ManuCo s but also the goods of other customers. The trucks and engines are stored at Transport Solutions premises when not being used to transport goods. 11

12 Illustrative examples Solution: Is it a lease or a service contract? There is no identified asset in this contract. As a result Solutions is only providing freight capacity to ManuCo s. This contract is a service contract and IFRS 16 does not apply. It is not a lease! 12

13 Recognition exemptions and practical expedients Lessee accounting Optional lessee recognition exemptions: Can straight-line expense and keep off-balance sheet: i) leases with a lease term of 12 months or less and no purchase options election made by class of underlying asset; and ii) leases where underlying asset has a low value when new (e.g. personal computers or small items of office furniture) election made on lease-bylease basis Treating an entire contract that contains a lease, as a lease: IFRS 16 only requires lessees to bring the lease component of a contract onbalance sheet. Payments for non-lease services such as maintenance or security are expensed as incurred. Allocation of contract payments between lease and service components made on basis of relative standalone prices: considerable judgement may be required to estimate. Lessee can elect, as practical expedient, to treat entire contracts that contain a lease as a single lease, removing the need for an unbundling exercise but increasing the liability and asset recorded. Accounting for leases on a portfolio basis: Where an entity has portfolios of leases with similar lease characteristics the standard permits the accounting to be on a portfolio basis, using estimates and assumptions for the portfolio, if it is not expected to result in materially different accounting. May be of particular relevance to leases of low value items of equipment, or short-term property leases. May be of particular relevance for multioccupancy properties such as office blocks, industrial estates, and shopping centres. Likely to apply to leases for items such as cars where they are all part of a master agreement. 13

14 Initial recognition 14

15 Lessee accounting The balance sheet Right-of-use asset and liability recognised on lease commencement under single model Liability Initially measured at present value of lease payments Lease term similar to IAS 17 ( reasonably certain ) Variable lease payments that depend on index or rate included in initial measurement using rate at commencement Subsequently remeasured (and asset adjusted) for changes in: lease term and purchase option assessments, using revised discount rate; and residual value guarantees and future lease payments resulting from index/rate changes, using original discount rate Asset Initially measured at amount of liability plus initial direct costs Adjusted for lease incentives, payments at or prior to commencement and restoration obligations Subsequently measured at cost less depreciation and impairment (unless investment property that is fair valued or belongs to class of PPE that is revalued) Test for impairment under IAS 36 (instead of onerous lease provisions) 15

16 Illustrative examples Question: Can you calculate the Right of Use Asset and the lease liability? Background A Landlord leases to a Tenant, and the Tenant rents from the Landlord the following premises: 1 Meadow Lane, Dublin (the Premises ). This agreement is for a period of ten years, commencing on March 1, 2020 ( the Lease Term ). The tenant has the option to extend the lease agreement for an additional five years, which is to be exercised before the end of the Lease Term. The Tenant shall pay 200,000 annually to the Landlord, with the first payment due for payment on March 1, The non-cancellable period of the Lease Term is two years. Should the Tenant terminate the lease after two years, a penalty fee will be payable to the Landlord. The penalty fee will comprise of the remaining payments + 15%. The contract signing date is 1 February Additional facts about the contact: It is reasonably certain that tenant will exercise the option to extend the lease for an additional five years. Initial direct costs have been incurred of 3,000. These fees related to professional fees including real estate commission fees and legal review of the lease agreement. The tentant s incremental borrowing rate has been assessed to be 8%, as the interest rate implicit in the contract cannot be readily determined. 16

17 Illustrative examples Solution: Can you calculate the initial Right of Use Asset and the lease liability? The interest rate implicit in the contract is not readily determinable so the tenant should use the incremental borrowing rate of 8% as the discount rate to calculate the PV of the lease payments. At the commencement date, the tenant shall measure the lease liability at the PV of the lease payments that are not paid at that date. As the first payment was due on the commencement date (i.e. 1 march) this was excluded from the calculation of the PV of the lease payment. Discount rate 8.00% The lease term used for computation is fifteen years (i.e. 10 years plus the option to extend the contract for another 5 years) as it is reasonably certain that tenant will exercise the option. Year Date Discount rate Payment Liability Right of use asset 0 01-Mar , , Mar , , , Mar , , , Mar , , , Mar , , , Mar , , , Mar , , , Mar , , , Mar , , , Mar , , , Mar ,000 92,639 92, Mar ,000 85,777 85, Mar ,000 79,423 79, Mar ,000 73,540 73, Mar ,000 68,092 68, Mar ,648,847 1,848,847 The right of use assets is measured at the present value of the expected lease payments at the commencement of the lease. 17

18 Illustrative examples Solution: Can you calculate the Right of Use Asset and the lease liability? Dr Right of use asset 1,848,847 Cr Lease liability 1,648,847 Cr Cash 200,000 Being the recording of the right of use asset and lease liability at inception at the present value of the lease payments over the lease term Dr Right of use asset 3,000 Cr Cash (Initial direct costs) 3,000 Being recording of the payment of initial direct costs. The right of use asset should include the initial direct costs of 3,

19 Other key considerations Sale and leaseback Profit on disposal is restricted to right of use asset transferred Disclosing expected impact IFRS 16 disclosure requirements IFRS 16 disclosure requirements Disclosure is more extensive than under IAS 17; judgement required to determine what to disclose and how. Impairment review Onerous lease provisions are a thing of the past; reviewing rightof-use asset for impairment may present new challenges. Impairment review Impact on KPIs/ratios Disclosing expected impact FRC and ESMA require expected impact of forthcoming standards to be disclosed. Subleases Subleases Sublease is classified as operating or finance. If a finance lease it is derecognized from the balance sheet. Wider considerations 19

20 Transition 20

21 Lessee accounting Transition Choice of transition approach determines impact on transition date balance sheet and future P&L Options for transitioning to IFRS 16 Effective for periods beginning on or after 1 Jan 2019 Earlier application permitted if IFRS 15 has also been applied Retrospective application or cumulative catch-up approach? This is a single choice that must be applied to all leases Option 1 retrospective Restate comparatives as if IFRS 16 always applied Not required to reassess whether a contract is, or contains, a lease at the date of initial application Challenge for systems to capture all data? Option 2 cumulative catch-up Leave comparatives as previously reported Any difference between asset and liability recognised in opening retained earnings at transition Carry forward existing finance lease liabilities Calculate outstanding liability for existing operating leases using incremental borrowing rate at date of transition Choose how to measure asset on lease-by-lease basis A lessee must make a single choice on how to transition Transition choice will impact net assets, distributable reserves and future P&L Option 2A Measure asset as if IFRS 16 had been applied from lease commencement (but using incremental borrowing rate at date of transition. Option 2B Measure asset at amount equal to liability (adjusted for accruals and prepayments) 21

22 Lessee accounting Transition Application of transition options example Example facts: 5-year lease, entered into on 1 Jan 2017; 100k payable on second day of each year. 8% discount rate at lease commencement; 12% discount rate at date of transition. Right-of-use asset is depreciated straight-line. Option 1 Option 2A Option 2B 22

23 Disclosure 23

24 The objective of the disclosures is for lessees to disclose information in the notes that, together with the information provided in the statement of financial position, statement of profit or loss and statement of cash flows, gives a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of the lessee. 24

25 Key disclosures Lessee accounting A lessee shall disclose information: In a single note or separate section in its financial statements. In a tabular format, unless another format is more appropriate. Disclosure is required of the expense recognised for shortterm leases and leases of low value assets when either practical expedient is used. Detail on sale and leaseback transactions Restrictions or covenants imposed by leases. Depreciation by class of underlying asset; income from sub-leases of right-of-use assets; interest expense; gains and losses on sale and leaseback transactions; and variable lease payments expensed. An explanation of any difference between: operating lease commitments disclosed applying IAS 17 at the end of the annual reporting period immediately preceding the date of initial application, discounted using the incremental borrowing rate at the date of initial application; and lease liabilities recognised in the statement of financial position at the date of initial application. Additional qualitative and quantitative information about its leasing activities is necessary. If a lessee uses one or more of the specified practical expedients in paragraph, it shall disclose that fact. Must maintain a record of low value leases. 25

26 Key disclosures Lessee accounting Meeting the disclosure objective Consider: 1. The flexibility provided by leases. 2. Restrictions imposed by leases. 3. Sensitivity of reported information to key variables. 4. Exposure to other risks arising from leases. 5. Deviations from industry practice. Additional information relating to extension options or termination options Additional information relating to residual value guarantees Additional information relating to variable lease payments 26

27 Practical challenges 27

28 Discount rates 28

29 Lessee accounting The discount rate Interest rate implicit in the lease The rate of interest that causes the present value of (a) the lease payments and (b) the unguaranteed residual value to equal the sum of (i) (ii) the fair value of the underlying asset and Any initial direct costs of the lessor. Incremental borrowing rate The rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the rightof-use asset in a similar economic environment. Determining appropriate discount rates The interest rate implicit in the lease should be used if it can be readily determined; otherwise, use the incremental borrowing rate. Determining the rate implicit in the lease requires knowledge of the underlying asset s residual value and its fair value; information unlikely to be readily available to lessees. 29

30 Lessee accounting The discount rate Why does it matter? Example fact pattern: On 1 Jan 2020, a company enters into 700 new 10-year leases with rentals of 48,000 each per year paid in arrears. Under IAS 17 it would have recognised a straight-line expense of 33.6m per year. Discount rate 5% 7% 10% Initial liability 259m 236m 206m Year 1 expense Year 5 expense Year 9 expense 39m 40m 41m 34m 35m 35m 29m 28m 26m Total payable 336m 336m 336m 30

31 Discount rate How to calculate an incremental borrowing rate Align weighted average payment term of the lease with the term for the source of the risk free rate Adjust risk free rates for unusual items such as hyperinflationary economies, currency unions and countries which use a currency that is not their own Risk free rate Ensure credit spread data points are relevant at the lease inception date Use credit spreads from debt that best matches the weighted average payment term of the lease, otherwise estimate Be aware that group funding policies may not be relevant considerations for determining the IBR Make an adjustment if there is benefit to the lender in the form of a secured asset Get data from banks or lenders as unlikely to have secured borrowing rates The IFRS 16 IBR is not: IAS 23 Borrowing Rate IAS 36 impairment discount rate 31

32 Some final thoughts The challenge doesn t end once you have some rates 32

33 Data Collation 33

34 Lease Information Collation Data Points Start & End Date Termination Purchase, Extension Clauses Monthly/ Annual Rent Charge Renewal Terms Future Restoration Costs Collars & Caps Service Element Payments Initial Direct Costs Is asset sublet Lease incentives Asset Identifiers Frequency of Lease Payments Asset value at new IRIIL Variable Lease Payment & Index Frequency of Rent Increases Fixed Rate Increase Percentage Guaranteed Residual Value 34

35 U.S. GAAP versus IFRS 16 35

36 U.S. GAAP and Dual reporters IASB s and the FASB s new leases standards Effective date Day 1 versus Day 2 There is no exemption for leases of lowvalue assets Leases recognised on the balance sheet Remeasurement assessment for leases tied to an index or rate Transition approach 36

37 Project Management 37

38 Illustrative IFRS 16 Timelines Interim FS IFRS 16 is much more than just an accounting change. Companies need to give consideration to the impact on data, systems, processes and controls and broader impacts including tax, remuneration, treasury and regulatory requirements. Project governance Train all staff Develop project plan, timeline of activities, resources (including structure) & budget Identify & engage key stakeholders Assess, analyse and prepare Perform readiness assessment Establish scope of IFRS 16 Develop accounting policy including transition Define data requirements Define technology strategy Implement Collect and analyse lease data Build lease calculator / lease models Implement required system changes Prepare draft IFRS 16 disclosures Embed Define business-asusual state objectives and implement changes Update financial reporting processes and controls Define test strategy Perform dry runs & UAT (as appropriate) Mitigate and strategise Share learnings and educate stakeholders Consider impacts on treasury, remuneration, performance measurement, and regulatory requirements Scrutinise significant contractual arrangements and future contract governance 38

39 Readiness and resources 39

40 Additional resources IAS Plus IFRS 16 website Deloitte e-learning IFRS 16 (basic) Deloitte e-learning IFRS 16 (advanced) Deloitte Accounting Research Tool DART Alternatively please refer to your Deloitte contact. 40

41 Questions 41

42 The Deloitte Team Kevin Butler Partner Audit & Assurance T: +353 (0) E: John Kelly Director Audit & Assurance T: +353 (0) E: Oliver Holt Director Audit & Assurance T: +353 (0) E: 42

43 Deloitte, a partnership established under the laws of Ireland, is the Ireland member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. Please see About Deloitte to learn more about our global network of member firms. At Deloitte, we make an impact that matters for our clients, our people, our profession, and in the wider society by delivering the solutions and insights they need to address their most complex business challenges. As the largest global professional services and consulting network, with approximately 263,900 professionals in more than 150 countries, we bring world-class capabilities and high-quality services to our clients. In Ireland, Deloitte has nearly 3,000 people providing audit, tax, consulting, and corporate finance services to public and private clients spanning multiple industries. Our people have the leadership capabilities, experience and insight to collaborate with clients so they can move forward with confidence. This communication contains general information only, and none of Deloitte, Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the Deloitte Network ) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication Deloitte. All rights reserved

Headline Verdana Bold The evolutions of leases accounting under IFRS 16 Mariano Bruno, Carlo Laganà, Giuseppe Ambrosio, Deloitte & Touche S.p.A.

Headline Verdana Bold The evolutions of leases accounting under IFRS 16 Mariano Bruno, Carlo Laganà, Giuseppe Ambrosio, Deloitte & Touche S.p.A. SHIPPING AND THE LAW 7^ Edition 25-26 October 2016 NAPLES Headline Verdana Bold The evolutions of leases accounting under IFRS 16 Mariano Bruno, Carlo Laganà, Giuseppe Ambrosio, Deloitte & Touche S.p.A.

More information

Gearing up for change New IFRS on Leases

Gearing up for change New IFRS on Leases Gearing up for change New IFRS on Leases In a nutshell The changes Lessee accounting Effective date: 1 January 2019 Limited changes to scope of IAS 17 Enhanced guidance on identifying a lease Lessor accounting

More information

IFRS 16 Leases supplement

IFRS 16 Leases supplement IFRS 16 Leases supplement Guide to annual financial statements IFRS December 2017 kpmg.com/ifrs Contents About this supplement 1 About IFRS 16 3 The Group s lease portfolio 6 Part I Modified retrospective

More information

IFRS 16 Lease overview and EY s enabling toolkit

IFRS 16 Lease overview and EY s enabling toolkit IFRS 16 Lease overview and EY s enabling toolkit Content Page Section I IFRS 16 overview 2 Appendix I EY Lease enabling technology suite 9 Appendix II EY Contacts 17 Page 1 IFRS 9 Classification and measurement

More information

International Financial Reporting Standard 16 Leases. Objective. Scope. Recognition exemptions (paragraphs B3 B8) IFRS 16

International Financial Reporting Standard 16 Leases. Objective. Scope. Recognition exemptions (paragraphs B3 B8) IFRS 16 International Financial Reporting Standard 16 Leases Objective 1 This Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective is to ensure

More information

The new accounting standard for leases. 27 March 2017

The new accounting standard for leases. 27 March 2017 The new accounting standard for leases 27 March 2017 Disclaimer Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity.

More information

IFRS 16 Leases. PICPA IFRS: New Standards and Updates Dubai. 28 April 2017

IFRS 16 Leases. PICPA IFRS: New Standards and Updates Dubai. 28 April 2017 IFRS 16 Leases PICPA IFRS: New Standards and Updates Dubai 28 April 2017 1 More transparent lease accounting IFRS 16 will bring most leases on-balance sheet from 2019. All companies that lease assets for

More information

New leases standard ASC 842 Lessee - operating leases. Itai Gotlieb, Partner, Professional Practice July 2017

New leases standard ASC 842 Lessee - operating leases. Itai Gotlieb, Partner, Professional Practice July 2017 ASC 842 Lessee - operating leases Itai Gotlieb, Partner, Professional Practice July 2017 Overview Under Accounting Standards Codification (ASC) 842, Leases, lessees recognize assets and liabilities for

More information

In December 2003 the IASB issued a revised IAS 17 as part of its initial agenda of technical projects.

In December 2003 the IASB issued a revised IAS 17 as part of its initial agenda of technical projects. IFRS Standard 16 Leases In April 2001 the International Accounting Standards Board (IASB) adopted IAS 17 Leases, which had originally been issued by the International Accounting Standards Committee (IASC)

More information

In December 2003 the Board issued a revised IAS 17 as part of its initial agenda of technical projects.

In December 2003 the Board issued a revised IAS 17 as part of its initial agenda of technical projects. IFRS 16 Leases In April 2001 the International Accounting Standards Board (the Board) adopted IAS 17 Leases, which had originally been issued by the International Accounting Standards Committee (IASC)

More information

Sri Lanka Accounting Standard - SLFRS 16. Leases

Sri Lanka Accounting Standard - SLFRS 16. Leases Sri Lanka Accounting Standard - SLFRS 16 Leases CONTENTS from paragraph SRI LANKA ACCOUNTING STANDARD - SLFRS 16 LEASES INTRODUCTION OBJECTIVE 1 SCOPE 3 RECOGNITION EXEMPTIONS 5 IDENTIFYING A LEASE 9 Separating

More information

10 TH European IFRS power and utilities roundtable

10 TH European IFRS power and utilities roundtable 10 TH European IFRS power and utilities roundtable Victor Chan, Partner, EY 29 November 2016 European IFRS Power and Utilities roundtable IFRS 16 Leases: the journey so far November 2016 Agenda Overview

More information

IFRS 16 LEASES. Page 1 of 21

IFRS 16 LEASES. Page 1 of 21 IFRS 16 LEASES OBJECTIVE The objective is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions. This information gives a basis for users

More information

International GAAP Holdings Limited Model financial statements for the year ended 31 December 2017 (With early adoption of IFRS 16)

International GAAP Holdings Limited Model financial statements for the year ended 31 December 2017 (With early adoption of IFRS 16) International GAAP Holdings Limited Model financial statements for the year ended 31 December 2017 (With early adoption of IFRS 16) Appendix 1: Early application of IFRS 16 Leases Introduction This Appendix

More information

LEASES WHERE ARE WE? Steve Rathjen

LEASES WHERE ARE WE? Steve Rathjen LEASES WHERE ARE WE? Steve Rathjen 267 256-3110 srathjen@kpmg.com Agenda Project status Lease definition and classification Lessee accounting Lessor accounting Presentation, disclosures, and transition

More information

IFRS 16 : Lease accounting

IFRS 16 : Lease accounting IFRS 16 : Lease accounting Effective for accounting periods beginning on or after 1 January 2019 December 2017 IFRS 16: Lease accounting The IASB published the new IFRS 16 lease standard, in order to avoid

More information

Applying the new lease accounting standard

Applying the new lease accounting standard Applying the new lease accounting standard In February 26, the FASB issued Accounting Standards Update (ASU) No. 26-, Leases (codified as Accounting Standards Codification Topic (ASC) 842). ASC 842 introduces

More information

IASB/FASB Exposure Draft on Leases. Accounting in the Retail Industry A new view of lease accounting emerges

IASB/FASB Exposure Draft on Leases. Accounting in the Retail Industry A new view of lease accounting emerges IASB/FASB Exposure Draft on Leases Accounting in the Retail Industry A new view of lease accounting emerges Contents Introduction 1 Issue 1 Impact of capitalisation of all leases on financial statements

More information

Applying IFRS in consumer products and retail

Applying IFRS in consumer products and retail Applying IFRS in consumer products and retail Leases standard Consumer products and retail Updated June 2017 Contents Overview 2 1. Identifying a lease 3 1.1 Definition of a lease 3 1.2 Identified asset

More information

New IFRS 15 & IFRS 16 standards The impact on M&A transactions. New IFRS 15 & IFRS 16 standards The impact on M&A transactions

New IFRS 15 & IFRS 16 standards The impact on M&A transactions. New IFRS 15 & IFRS 16 standards The impact on M&A transactions New IFRS 15 & IFRS 16 standards The impact on M&A transactions 0 Contents Introduction 1 Executive summary 3 New revenue recognition standard IFRS 15 5 New lease standard IFRS 16 9 We can assist you in

More information

Leases: A Comprehensive Update on the Joint Project

Leases: A Comprehensive Update on the Joint Project The Dbriefs Financial Reporting series presents: Leases: A Comprehensive Update on the Joint Project Bob Uhl, Deloitte & Touche LLP Trevor Farber, Deloitte & Touche LLP James Barker, Deloitte & Touche

More information

Applying IFRS in Financial Services

Applying IFRS in Financial Services Applying IFRS in Financial Services IASB issues new leases standard - financial services April 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease

More information

What private companies need to know about applying the new lease standard

What private companies need to know about applying the new lease standard What private companies need to know about applying the new lease standard In February 26, the FASB issued Accounting Standards Update (ASU) No. 26-, Leases (codified as Accounting Standards Codification

More information

Edison Electric Institute and American Gas Association New Lease Standard

Edison Electric Institute and American Gas Association New Lease Standard Edison Electric Institute and American Gas Association New Lease Standard May 16, 2016 Disclaimer The information contained herein is of a general nature and is not intended to address the circumstances

More information

The New Lease Accounting Standard. Hunter Mink, CPA, CCIFP Brian Rosenberg, CPA, MBA

The New Lease Accounting Standard. Hunter Mink, CPA, CCIFP Brian Rosenberg, CPA, MBA The New Lease Accounting Standard Hunter Mink, CPA, CCIFP Brian Rosenberg, CPA, MBA 1 Agenda Introduction Lease Identification and Classification Lessee Accounting Other Considerations Disclosures Impact

More information

Lease Accounting and Loan Covenants: What is the Impact?

Lease Accounting and Loan Covenants: What is the Impact? Lease Accounting and Loan Covenants: What is the Impact? Monday June 26, 2017 9:15 AM 10:30 AM Presented by: Charlie Shannon Partner Moss Adams LLP 8750 N. Central Expressway, Suite 300 Dallas, TX 75231

More information

Lease Update. June 2017 Addison, Texas

Lease Update. June 2017 Addison, Texas Lease Update June 2017 Addison, Texas William Bill Schneider CPA, CGMA Bill is an Audit Director at AT&T. AT&T delivers advanced mobile services, next-generation TV, highspeed internet and smart solutions

More information

Leases: Overview of the new guidance

Leases: Overview of the new guidance Leases: Overview of the new guidance Prepared by: Richard Stuart, Partner, National Professional Standards Group, RSM US LLP richard.stuart@rsmus.com, +1 203 905 5027 March 2, 2016 Introduction On February

More information

Lease accounting scope & impacts

Lease accounting scope & impacts Leasing Lease accounting scope & impacts Scope What s in? All industries, all entities Arrangements that meet the definition of a lease Embedded leases within other arrangements What s out? Leases of:

More information

Defining Issues. FASB Completes Technical Redeliberations on Leases. October 2015, No Key Facts. Key Impacts

Defining Issues. FASB Completes Technical Redeliberations on Leases. October 2015, No Key Facts. Key Impacts Defining Issues October 2015, No. 15-47 FASB Completes Technical Redeliberations on Leases The FASB met on October 7 to discuss comments received and related follow-up issues on the external review of

More information

IFRS 15 Revenue from contracts with customers Presentation by: CPA Freda Mitambo Partner, Deloitte & Touche

IFRS 15 Revenue from contracts with customers Presentation by: CPA Freda Mitambo Partner, Deloitte & Touche IFRS 15 Revenue from contracts with customers Presentation by: CPA Freda Mitambo Partner, Deloitte & Touche Uphold public interest Why IFRS 15 is important What does it mean for clients? Revenue recognition

More information

AASB 16: Experience the Fundamental Overhaul of Lease Accounting for Lessees

AASB 16: Experience the Fundamental Overhaul of Lease Accounting for Lessees AASB 16: Experience the Fundamental Overhaul of Lease Accounting for Lessees Introduction to Session This introductory session we will: Explore the Principles of AASB 16 Learn how to Identify a Lease Work

More information

Technical Line FASB final guidance

Technical Line FASB final guidance No. 2019-01 3 January 2019 Technical Line FASB final guidance How the new leases standard affects automotive entities In this issue: Overview... 1 Recent standard setting activity... 2 Key considerations...

More information

Exposure Draft. Indian Accounting Standard (Ind AS) 116 Leases. (Last date for Comments: August 31, 2017)

Exposure Draft. Indian Accounting Standard (Ind AS) 116 Leases. (Last date for Comments: August 31, 2017) ED/Ind AS/2017/06 Exposure Draft Indian Accounting Standard (Ind AS) 116 Leases (Last date for Comments: August 31, 2017) Issued by Accounting Standards Board The Institute of Chartered Accountants of

More information

Technical Line FASB final guidance

Technical Line FASB final guidance No. 2016-09 14 April 2016 Technical Line FASB final guidance How the FASB s new leases standard will affect health care entities In this issue: Overview... 1 Key considerations... 3 Scope and scope exceptions...

More information

Summary of IFRS Exposure Draft Leases

Summary of IFRS Exposure Draft Leases The International Accounting Standards Board (IASB) recently issued a revised exposure draft (ED) relating to leases. Once these proposals are finalized the new guidance will replace the IAS 17 Leases.

More information

FRS 116 Leases: Through the Eyes of Auditors. Ng Kian Hui, Head of Audit & Assurance BDO LLP

FRS 116 Leases: Through the Eyes of Auditors. Ng Kian Hui, Head of Audit & Assurance BDO LLP FRS 116 Leases: Through the Eyes of Auditors Ng Kian Hui, Head of Audit & Assurance BDO LLP OUTLINE 1. FRS 116 Leases General Overview 2. Identifying a Lease 3. Determining the Lease Term 4. Recognition

More information

Lease Accounting Standard Update ASU Presented by: Nicholas Hoefel, CPA Manager, Audit Services Group

Lease Accounting Standard Update ASU Presented by: Nicholas Hoefel, CPA Manager, Audit Services Group Lease Accounting Standard Update ASU 2016-02 Presented by: Nicholas Hoefel, CPA Manager, Audit Services Group 1 Overview Introduction Background and current environment Effective dates and transition Key

More information

Implementing the New Lease Guidance

Implementing the New Lease Guidance Implementing the New Lease Guidance October 22, 2018 2018 Crowe LLP 2018 Crowe LLP Agenda Background Scope Effective dates & transition requirements Lessee accounting model Lessor accounting model Specialized

More information

Applying IFRS. Presentation and disclosure requirements of IFRS 16 Leases. November 2018

Applying IFRS. Presentation and disclosure requirements of IFRS 16 Leases. November 2018 Applying IFRS Presentation and disclosure requirements of IFRS 16 Leases November 2018 Contents 1. Overview 2 2. What is changing from current IFRS? 4 2.1 Presentation 4 2.2 Lessee disclosures 5 3. Presentation

More information

Exposure Draft 64 January 2018 Comments due: June 30, Proposed International Public Sector Accounting Standard. Leases

Exposure Draft 64 January 2018 Comments due: June 30, Proposed International Public Sector Accounting Standard. Leases Exposure Draft 64 January 2018 Comments due: June 30, 2018 Proposed International Public Sector Accounting Standard Leases This document was developed and approved by the International Public Sector Accounting

More information

IFRS 15. Revenue from Contracts with Customers. Presented by CPA Dr. Peter Njuguna

IFRS 15. Revenue from Contracts with Customers. Presented by CPA Dr. Peter Njuguna IFRS 15 Revenue from Contracts with Customers Presented by CPA Dr. Peter Njuguna Introduction Revenue is income from ordinary activities. A contract has rights and obligations between two or more parties.

More information

Major reforms to global lease accounting

Major reforms to global lease accounting s n ng ew o N diti nti u RS l E o IF ia cc ec e A Sp as Le on Major reforms to global lease accounting - IFRS 16 Leases equivalent to MFRS 16 Leases issued by Malaysian Accounting Standards Board on 15

More information

New Zealand Equivalent to International Financial Reporting Standard 16 Leases (NZ IFRS 16)

New Zealand Equivalent to International Financial Reporting Standard 16 Leases (NZ IFRS 16) New Zealand Equivalent to International Financial Reporting Standard 16 Leases (NZ IFRS 16) Issued February 2016 This Standard was issued on 11 February 2016 by the New Zealand Accounting Standards Board

More information

HKFRS 16 Leases. Disclaimer. Date 21 April 2017 Time 19:00 21:00 Venue Boys' and Girls' Clubs Association

HKFRS 16 Leases. Disclaimer. Date 21 April 2017 Time 19:00 21:00 Venue Boys' and Girls' Clubs Association HKFRS 16 Leases Date 21 April 2017 Time 19:00 21:00 Venue Boys' and Girls' Clubs Association www.zhtraining.com Disclaimer The materials of this seminar are intended only to provide general information

More information

A Review of IFRS 16 Leases By Tan Liong Tong

A Review of IFRS 16 Leases By Tan Liong Tong A Review of IFRS 16 Leases By Tan Liong Tong In April 2016, the MASB issued MFRS 16 Leases that is identical to IFRS 16 Leases issued by the IASB in January 2016. The effective date of this new MFRS is

More information

Technical Line FASB final guidance

Technical Line FASB final guidance No. 2018-15 6 December 2018 Technical Line FASB final guidance How the new leases standard affects consumer products and retail entities In this issue: Overview... 1 Recent standard-setting activity...

More information

Miles CPA Review: FAR Updates

Miles CPA Review: FAR Updates Miles CPA Review: FAR - 2019 Updates Summary of updates: - FAR-4.4: s [ASC 842] effective fiscal years beginning after Dec 15, 2018 (for issuers) and effective fiscal years beginning after Dec 15, 2019

More information

Defining Issues May 2013, No

Defining Issues May 2013, No Defining Issues May 2013, No. 13-24 FASB and IASB Issue Revised Exposure Drafts on Lease Accounting The FASB and IASB (the Boards) recently issued revised joint exposure drafts (EDs) on proposed changes

More information

REAL ESTATE PERSPECTIVE ON NEW LEASE ACCOUNTING STANDARDS

REAL ESTATE PERSPECTIVE ON NEW LEASE ACCOUNTING STANDARDS VALUATION & ADVISORY REAL ESTATE PERSPECTIVE ON NEW LEASE ACCOUNTING STANDARDS BY JOHN CORBETT, MAI, ASA, FRICS AND MARC R. SHAPIRO, MAI, MRICS INTRODUCTION The Financial Accounting Standards Board (FASB)

More information

Is Your Operating Lease An Asset or Liability? It s Now Both

Is Your Operating Lease An Asset or Liability? It s Now Both MFM Annual Conference Is Your Operating Lease An Asset or Liability? It s Now Both 23 May 2016-1:30 pm 2:20 pm Disclaimer These slides are for educational purposes only and are not intended, and should

More information

IFRS Project Insights Leases

IFRS Project Insights Leases IFRS Project Insights Leases The IASB and FASB ( the Boards ) published a Discussion Paper (DP) setting out a proposed lessee accounting model in March 2009. The proposed accounting model has evolved since

More information

IASB Staff Paper March 2011

IASB Staff Paper March 2011 IASB Staff Paper March 2011 Effect of board redeliberations on Exposure Draft Leases About this staff paper This staff paper indicates how the proposals in the Exposure Draft Leases would change as a result

More information

Something Borrowed, Something New Get Ready for the New Lease Accounting Standard

Something Borrowed, Something New Get Ready for the New Lease Accounting Standard April 2016 Something Borrowed, Something New Get Ready for the New Lease Accounting Standard By Scott G. Lehman, CPA, and David E. Wentzel, CPA Audit / Tax / Advisory / Risk / Performance Smart decisions.

More information

The joint leases project change is coming

The joint leases project change is coming No. 2010-4 18 June 2010 Technical Line Technical guidance on standards and practice issues The joint leases project change is coming What you need to know The proposed changes to the accounting for leases

More information

Technical Line FASB final guidance

Technical Line FASB final guidance No. 2018-08 20 September 2018 Technical Line FASB final guidance How the new leases standard affects engineering and construction entities In this issue: Overview... 1 Key considerations... 2 Scope and

More information

Get ready for FRS 116: Leases

Get ready for FRS 116: Leases Get ready for FRS 116: Leases Chetan Hans & Eng Min Lor Grant Thornton Singapore Overview of main changes Replaces FRS 17 Leases, INT FRS 104 Determining whether an Arrangement contains a Lease, INT FRS

More information

Impact of lease accounting changes to corporate real estate

Impact of lease accounting changes to corporate real estate Impact of lease accounting changes to corporate real estate Overview In February 2016, the Financial Accounting Standards Board (FASB) issued its long-awaited revision to lease accounting Accounting Standards

More information

AASB 16 Leases A fundamental overhaul of lessee accounting effective 2019

AASB 16 Leases A fundamental overhaul of lessee accounting effective 2019 AASB 16 Leases A fundamental overhaul of lessee accounting effective 2019 kpmg.com.au Understanding the impact to your company A new leasing standard AASB 16 Leases removes the concept of operating and

More information

Technical Line FASB final guidance

Technical Line FASB final guidance No. 2016-11 14 April 2016 Technical Line FASB final guidance How the FASB s new leases standard will affect real estate entities In this issue: Overview... 1 Key considerations... 2 Scope and scope exceptions...

More information

Why IFRS 16 matters to the shipping industry

Why IFRS 16 matters to the shipping industry www.pwc.no Why IFRS 16 matters to the shipping industry October 2017 Executive summary New lease standard to be effective 1 January 2019. Early implementation permitted together with IFRS 15 (effective

More information

In-depth A look at current financial reporting issues

In-depth A look at current financial reporting issues inform.pwc.com In-depth A look at current financial reporting issues No. INT2018-08 What s inside: Overview... 2 Is the contract a lease?... 3 Components, contract consideration and allocation... 5 Initial

More information

IFRS industry insights

IFRS industry insights IFRS Global Office September 2011 IFRS industry insights The Leases Project An update for the consumer business industry The tentative decision to limit the extent to which variable payments are estimated

More information

FSA Faculty Consortium Technical Accounting Update. Bob Uhl, partner, Deloitte & Touche LLP

FSA Faculty Consortium Technical Accounting Update. Bob Uhl, partner, Deloitte & Touche LLP FSA Faculty Consortium Technical Accounting Update Bob Uhl, partner, Deloitte & Touche LLP Deloitte University May 30, 2014 Acronyms Acronym ASC ASU ED FASB IASB IFRS U.S. GAAP Full Form Accounting Standards

More information

Adviser alert Insights into IFRS 16 Understanding the discount rate

Adviser alert Insights into IFRS 16 Understanding the discount rate Adviser alert Insights into IFRS 16 Understanding the discount rate November 2018 Overview The Grant Thornton International IFRS team has published Insights into IFRS 16 Understanding the discount rate.

More information

2018 Accounting & Auditing Update P R E S E N T E D B Y : D A N I E L L E Z I M M E R M A N & A N D R E A S A R T I N

2018 Accounting & Auditing Update P R E S E N T E D B Y : D A N I E L L E Z I M M E R M A N & A N D R E A S A R T I N 2018 Accounting & Auditing Update P R E S E N T E D B Y : D A N I E L L E Z I M M E R M A N & A N D R E A S A R T I N AGENDA Leases FASB & GASB Revenue Recognition FASB 2 FASB ASU 2016-02, Leases (Topic

More information

IFRS 16 : LEASES. M P Vijay Kumar

IFRS 16 : LEASES. M P Vijay Kumar IFRS 16 : LEASES M P Vijay Kumar IFRS 16, LEASES AGENDA 1 Background of IFRS 16 2 Primary requirements under IAS 17, Leases 3 IFRS 16, Leases 4 High Level Summary 4.1 Lease Definition 4.2 Lessee Accounting

More information

HKFRS 16 Leases sets out the principles for the recognition, measurement, presentation and disclosure

HKFRS 16 Leases sets out the principles for the recognition, measurement, presentation and disclosure HKFRS 16 Leases Introduction HKFRS 16 Leases sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective of HKFRS 16 is to ensure that lessees and lessors

More information

IFRS 16: Leases; a New Era of Lease Accounting!

IFRS 16: Leases; a New Era of Lease Accounting! The journal is running a series of updates on IFRS, IAS, IFRIC and SIC. The updates mostly collected from different sources of IASB publication, seminars, workshop & IFRS website. This issue is based on

More information

FASB/IASB Update Part II

FASB/IASB Update Part II American Accounting Association FASB/IASB Update Part II Tom Linsmeier FASB Member August 3, 2014 The views expressed in this presentation are those of the presenters. Official positions of the FASB/IASB

More information

International Accounting Standard 17 Leases. Objective. Scope. Definitions IAS 17

International Accounting Standard 17 Leases. Objective. Scope. Definitions IAS 17 International Accounting Standard 17 Leases Objective 1 The objective of this Standard is to prescribe, for lessees and lessors, the appropriate accounting policies and disclosure to apply in relation

More information

New IASB leases standard engineering and construction

New IASB leases standard engineering and construction Applying IFRS New IASB leases standard engineering and construction October 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease 3 1.3 Arrangements

More information

CPE regulations require online participants to take part in online questions

CPE regulations require online participants to take part in online questions KPMG s CFO Financial Forum Webcast FASB/IASB Revised Lease Accounting Exposure Drafts A Detailed Look Part III: Lessor Accounting June 25, 2013 Administrative CPE regulations require online participants

More information

Accounting and Auditing. Norman Mosrie, CPA, FMFMA, CHFP James Sutherland, CPA

Accounting and Auditing. Norman Mosrie, CPA, FMFMA, CHFP James Sutherland, CPA Accounting and Auditing Norman Mosrie, CPA, FMFMA, CHFP James Sutherland, CPA Leases (ASU 2016-02; Topic 842) A lease contract conveys the right to use an asset (the underlying asset) for a period of time

More information

IFRS 16 Leases. An overview. March 9, kpmg.com/ca/leases

IFRS 16 Leases. An overview. March 9, kpmg.com/ca/leases IFRS 16 Leases An overview March 9, 2016 kpmg.com/ca/leases Today s presenters Mag Stewart Jason Bower Jeff King Andy Brown Partner Professional Practice 416 777 8177 magstewart@kpmg.ca Partner Audit 604

More information

NOTICE TO MEMBERS NEW LEASE ACCOUNTING STANDARD-COMMENTARY

NOTICE TO MEMBERS NEW LEASE ACCOUNTING STANDARD-COMMENTARY AUSTRALIAN EQUIPMENT LESSORS ASSOCIATION Incorporated ABN 19 054 908 520 Level 8, 39 Martin Place Sydney 2000 Telephone (02) 9231 5479 Facsimile (02) 9232 5647 Website www.aela.asn.au 11 August 2016 NOTICE

More information

The new IFRS 16 Leases effective as of 1 January 2019

The new IFRS 16 Leases effective as of 1 January 2019 The new IFRS 16 Leases effective as of 1 January 2019 IFRS 16 was issued by IASB on 13 January 2016. The Standard is effective as of 1 January 2019. It has not yet been adopted by the EC. This is a Standard

More information

Applying IFRS. A closer look at the new leases standard. August 2016

Applying IFRS. A closer look at the new leases standard. August 2016 Applying IFRS A closer look at the new leases standard August 2016 Contents Overview 3 1. Scope and scope exceptions 5 1.1 General 5 1.2 Determining whether an arrangement contains a lease 6 1.3 Identifying

More information

Click to edit Master title style REVENUE RECOGNITION Understanding the New Revenue Recognition Standard ASC 606

Click to edit Master title style REVENUE RECOGNITION Understanding the New Revenue Recognition Standard ASC 606 Click to edit Master title style REVENUE RECOGNITION Understanding the New Revenue Recognition Standard ASC 606 9/7/2017 0 Agenda Overview of ASC 606 Review of the five-step process Accounting for contract

More information

Technical Line FASB final guidance

Technical Line FASB final guidance No. 2018-18 13 December 2018 Technical Line FASB final guidance How the new leases standard affects life sciences entities In this issue: Overview... 1 Key considerations... 2 Scope and scope exceptions...

More information

[TO BE PUBLLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

[TO BE PUBLLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] [TO BE PUBLLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 30 th March, 2019 G.S.R. (E).

More information

Real estate leases. How will IFRS 16 impact real estate entities? May 2016

Real estate leases. How will IFRS 16 impact real estate entities? May 2016 Real estate leases How will IFRS 16 impact real estate entities? May 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease 3 1.3 Identifying and separating

More information

Lease & Finance Accountants Conference. September The Westin Charlotte Charlotte, NC

Lease & Finance Accountants Conference. September The Westin Charlotte Charlotte, NC Lease & Finance Accountants Conference September 11-13 The Westin Charlotte Charlotte, NC H A N D O U T S Basic Principles of Lessors under ASC 842 Mamta Shori, Wells Fargo Equipment Finance Joe Sebik,

More information

LEASE ACCOUNTING UNDER IFRS 16 AND IAS 17 A COMPARATIVE APPROACH

LEASE ACCOUNTING UNDER IFRS 16 AND IAS 17 A COMPARATIVE APPROACH 78 LEASE ACCOUNTING UNDER IFRS 16 AND IAS 17 A COMPARATIVE APPROACH Lecturer PhD. Cristina Aurora BUNEA-BONTAȘ Constantin Brancoveanu University of Pitesti, Romania Email: bontasc@yahoo.com Abstract: In

More information

Lease modifications. Accounting for changes to lease contracts IFRS 16. September kpmg.com/ifrs

Lease modifications. Accounting for changes to lease contracts IFRS 16. September kpmg.com/ifrs Lease modifications Accounting for changes to lease contracts IFRS 16 September 2018 kpmg.com/ifrs Contents Contents Accounting for changes 1 1 At a glance 2 1.1 Key facts 2 1.2 Key impacts 3 2 Key concepts

More information

NEW LEASE ACCOUNTING STANDARD

NEW LEASE ACCOUNTING STANDARD NEW LEASE ACCOUNTING STANDARD Accounting Standards Update (ASU) 2016-02, Leases & GASB 87, Leases LEASES Leases: Why a New Leases Standard? 1 IMPLEMENTATION TIMELINE January 2016 IASB issued IFRS 16, Leases

More information

Executive Summary. New leases standard Lessees

Executive Summary. New leases standard Lessees Executive Summary December 2018 The new leases standard focuses on increased transparency and comparability providing financial statement users with more information about an entity s leasing activities.

More information

Proposed New Accounting Standards For Leases

Proposed New Accounting Standards For Leases Relationships backed by performance. Proposed New Accounting Standards For Leases Doug Richardson Live Seminar 9:00am 10:30am June 21 2012 Overview and Background Leases serve a vital role in many entities

More information

Countdown to MFRS 16 Are you ready?

Countdown to MFRS 16 Are you ready? Volume 6 - Issue 3 8 June 018 Countdown to MFRS 16 Are you ready? MFRS 16 sets a new turning point for lease accounting. With the requirement for most operating leases to be recognized on the balance sheet,

More information

Leases Discount rates

Leases Discount rates Leases Discount rates What s the correct rate? IFRS 16 September 2017 kpmg.com/ifrs Contents Contents Determining the correct rate 1 1 At a glance 2 1.1 Key facts 2 1.2 Key impacts 3 2 Lessor discount

More information

How the lease accounting proposal might affect your company

How the lease accounting proposal might affect your company Applying IFRS How the lease accounting proposal might affect your company August 2013 Contents 1. Overview... 1 2. Identifying a lease... 2 2.1 Scope exclusions... 2 2.2 Definition of a lease... 3 2.2.1

More information

Tracking IFRS Exposure draft on Leases

Tracking IFRS Exposure draft on Leases Issue 3 September 2010 Tracking IFRS Exposure draft on Leases 1. Introduction On 17 August 2010, the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB)

More information

Applying IFRS. New IASB leases standard oilfield services. December 2016

Applying IFRS. New IASB leases standard oilfield services. December 2016 Applying IFRS New IASB leases standard oilfield services December 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease 3 1.3 Identifying and separating

More information

IFRS Update Guy Thomas, CPA, CA

IFRS Update Guy Thomas, CPA, CA IFRS Update Guy Thomas, CPA, CA D&Co IFRS update Agenda 3 new standards under IFRS IFRS 9 Financial Instruments IFRS 15 Revenue from Contracts with Customers IFRS 16 Leases Agenda Some narrow scope amendments

More information

IASB issues new leases standard consumer products and retail

IASB issues new leases standard consumer products and retail Applying IFRS in consumer products and retail IASB issues new leases standard consumer products and retail June 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition

More information

Shipping insights briefing

Shipping insights briefing TRANSPORT Shipping insights briefing A view of the future: 2017 bigger balance sheets! kpmg.com Nearly two and a half years ago we issued a Shipping Insights Briefing, highlighting proposed changes to

More information

IFRS 16 Leases: Overview

IFRS 16 Leases: Overview IFRS Foundation IFRS 16 Leases: Overview Nairobi, Kenya Darrel Scott, IASB Member The views expressed in this presentation are those of the presenter, not necessarily those of the International Accounting

More information

NEED TO KNOW. Leases A Project Update

NEED TO KNOW. Leases A Project Update NEED TO KNOW Leases A Project Update 2 LEASES - A PROJECT UPDATE TABLE OF CONTENTS Introduction 3 Existing guidance and the rationale for change 4 The IASB/FASB project to date 5 The main proposals 6 Definition

More information

Annual Accounting and Auditing Update. 11 December 2015

Annual Accounting and Auditing Update. 11 December 2015 Annual Accounting and Auditing Update 11 December 2015 Disclaimer The views expressed by panelists are not necessarily those of Ernst & Young LLP. These slides are for educational purposes only and are

More information

Accounting and Auditing Update. Staci L. Brogan, CPA, Shareholder Patricia R. Giudici, CPA, Senior Manager Schneider Downs & Co. Inc.

Accounting and Auditing Update. Staci L. Brogan, CPA, Shareholder Patricia R. Giudici, CPA, Senior Manager Schneider Downs & Co. Inc. Accounting and Auditing Update Staci L. Brogan, CPA, Shareholder Patricia R. Giudici, CPA, Senior Manager Schneider Downs & Co. Inc. Agenda Overview of the standard setting agenda Revenue recognition Lease

More information