Leasing – A new era of accounting under IFRS 16

IFRS 16 ‘Leases’ represents the first major overhaul in lease accounting in over 30 years.

The Standard brings fundamental changes to lease accounting that replace previous accounting that is considered no longer fit for purpose.

IFRS 16 will affect most companies involved in leasing that report under International Financial reporting Standards (IFRS). It will have a substantial impact on the financial statements of lessees of property and high value equipment – requiring that leases be placed on-balance sheet by recognising a ‘right-of-use’ asset and a lease liability.