Entities who have any form of lease will be impacted by changes to lease accounting definitions and thus accounting standards under AASB 16 Leases, applying to financial years beginning on or after January 1, 2019.
The changes will see a single accounting model for all leases, where there is no distinction between finance and operating leases for lessees. This single recognition model will require all entities to recognise both assets and liabilities arising for all leases, with limited exemptions. The outcome of these changes could have significant impact on classifications in financial reporting and therefore effect an entity’s overall financial position.
The following comparative report, Lease Accounting, outlines the key changes, transition options and new accounting scenarios as well as possible consequences from these changes.
For further information regarding these changes contact your William Buck local office.
Small companies may meet gross asset test for large companies under new lease standards