All those differentiations between finance rent and running hire, but, will change once the brand new hire accounting fashionable is followed. International Financial Reporting Standard (IFRS) 16, the brand new leases widespread, powerful 2019, is said to be the first principal overhaul of lease accounting requirements in over 30 years.
This new wellknown affords, amongst others, a unmarried lessee accounting model, where all rentals are to be dealt with in a similar way as finance rentals. Accordingly, with the adoption of IFRS 16, all rentals (apart from for a short-term of 365 days or less and occasional value asset lease of belongings like a photocopier) can be accounted for “on-stability-sheet.”
How is this modification going to affect groups? If you are a lessee, how will this new wellknown affect you? How approximately if you are a lessor? Whether for a lessee or a lessor, what’s going to be the tax implication?
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