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25 January 2019

Applying IFRS: A closer look at IFRS 16 Leases

IFRS 16 Leases requires lessees to recognize assets and liabilities for most leases. The International Accounting Standards Board (IASB or the Board) issued the standard after joint deliberations with the Financial Accounting Standards Board (FASB), which issued a similar standard (ASC 842 Leases). However, there are significant differences between the IASB and FASB standards (e.g., lessees classify leases as finance or operating leases under the FASB standard). These differences will result in certain transactions being accounted for differently under IFRS and US GAAP. IFRS 16 is effective for annual periods beginning on or after 1 January 2019, with limited early application permitted. An EY article provides more detail on IFRS 16 Leases.

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Document ID: 2019-5115

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