The new standard on leases, FRS 116, which replaces standards such as FRS 17 (Leases) and INT FRS 104 (Determining whether an arrangement contains a lease), introduces changes that will primarily affect the financial statements of lessees.
Currently, lessees recognise rental expense on operating leases (Off-Balance Sheet). Under the new standard, such leases, with limited exception, will be recorded on the balance sheet of lessees.
FRS 116 is effective for annual periods beginning on or after 1 January 2019.
Our Audit Partner, Technical team and Tax Director from Crowe Singapore, provided an overview of the key changes from a lessee’s perspective and provide a summary of the tax impact.
The topics covered were as follows:
FRS 116 Leases
In addition, there are a number of amendments to the existing standards and one new interpretation which came into effect on 1 January 2019. Participants were also provided with a brief summary of relevant key changes brought about by: