International Perspectives

New Lease Accounting Standards

International Perspectives

Understanding the New Standards

New lease accounting standards contain dramatic changes that may affect the future of your organization’s balance sheet. The ASU No. 2016-02, “Leases (Topic 842)” and IASB-issued IFRS 16, “Leases” deadlines are quickly approaching, and any entity that enters into a lease will need to comp

More transparency – stakeholders will gain a clearer view into an organization’s leasing activities and their effects on the financial statements

Bigger balances – lessees will be required to recognize most leases “on balance sheet”

Dual effect – changes will affect not only lease accounting policies but also the systems used to manage them

Limited resources – companies may experience resource constraints as they manage implementation while still supporting their regular accounting processes

Ongoing compliance – processes and controls that govern lease acquisition and modification will need to be addressed

Tax implications – accounting changes could affect the organization’s income tax reporting