This program provides in-depth coverage of the new IFRS and US GAAP lease accounting standards. In January 2016 the International Accounting Standards Board (IASB) published IFRS 16, which supersedes IAS 17 (and related Interpretations) for annual
periods beginning on or after 1 January 2019. The US Financial Accounting Standards Board (FASB) published Topic 842, its own new leasing standard, in February 2016: public business entities must apply the new provisions for fiscal years beginning
after December 15, 2018.
Leasing has proved an important and flexible source of financing. Existing accounting rules produce different results, depending on whether a lease is classified as a finance (US GAAP uses the term ‘capital’) or an operating lease. Lessees currently
account for operating leases off balance sheet and merely disclose the commitment to pay future rentals as a note to the financial statements. Listed companies using IFRS or US GAAP are estimated to have around $3.3 trillion of lease commitments,
85% of which do not appear on the balance sheet. Under the respective IFRS and US GAAP Conceptual Frameworks, all leases produce assets and liabilities that meet the criteria for balance sheet recognition but accounting by lessees
for operating leases has been exempted from this treatment. Users often try to estimate the impact of the off balance sheet lease obligations, with limited accuracy.
The IASB and the FASB have jointly developed their new standards over a number of years and have reached the same conclusions in many areas:
However the Boards have not been able to agree on all matters, notably the pattern of recognizing expenses by lessees in the income statement and an exemption for low value assets.
This two-day course provides an in-depth review of the new standards.
Using case studies, examples and exercises, our specialist instructors explain and illustrate all the important issues.
This program answers questions such as:
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