ey-leases-a-summary-of-ifrs-16-and-its-effects-may-2016

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What you need to know IFRS 16 requires lessees to recognise most leases on their balance sheets. The new standard is a significant change in approach from current IFRS and will affect many entities across various industries. • Lessees will have a single accounting model for all leases, with two exemptions (low value assets and short term leases). • Lessor accounting is substantially unchanged. • There will be additional disclosure requirements. • The new standard will be effective from 1 January 2019 with limited early application permitted. What is in the scope or affected by the standard? Leases of all assets, except for: • Leases of non-regenerative resources • Leases of biological assets • Service concession arrangements • Licences of intellectual property granted by lessor • Rights held by a lessee under certain licensing agreements (e.g. films) 6 Leases | A summary of IFRS 16 and its effects | May 2016
Impact of the adoption of IFRS 16 Industry impact The following diagram illustrates the potential impact of the adoption of IFRS 16 on specific industries: High Retail and consumer products Level of impact on industry Insurance Mining & Metals Oil and Gas Construction & engineering Telecommunications Banking Low High Effort to comply Leases | A summary of IFRS 16 and its effects | May 2016 7
Page 1 and 2: Leases A summary of IFRS 16 and its
Page 3 and 4: Lessee accounting - Recognition and
Page 5: IFRS 16 requires lessees to recogni
Page 9 and 10: Metals and mining entities will nee
Page 11 and 12: Financial statement impact - Before
Page 13 and 14: Identifying and separating lease an
Page 15 and 16: Factors that impact the complexity
Page 17 and 18: Transition The new standard is effe
Page 19 and 20: Data collection and ongoing data ma
Page 21 and 22: certain of being exercised. As such
Page 23 and 24: How should companies prepare? Educa
Page 25 and 26: Contact us IFRS technical James Luk
Page 27 and 28: Leases | A summary of IFRS 16 and i

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