IASB Issues Standard on Leases
January 13, 2016 — Today, the IASB issued IFRS 16, Leases, which introduces a number of significant changes to the lease accounting model under IFRSs, including a requirement for lessees to recognize nearly all leases on their balance sheets.1 IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019. Early adoption is permitted; however, an entity cannot adopt this standard earlier than it adopts IFRS 15, Revenue From Contracts With Customers. For more information about the IASB’s new leases standard, see Deloitte’s January 13, 2016, IFRS in Focus.
Editor’s Note: The FASB is currently finalizing its new leases standard and is expected to issue it in February 2016. We expect the FASB’s new standard on lease accounting will be effective for public business entities for annual periods beginning after December 15, 2018 (i.e., calendar periods beginning on January 1, 2019), and interim periods therein. For all other entities, the standard would be effective for annual periods beginning after December 15, 2019 (i.e., calendar periods beginning on January 1, 2020), and interim periods thereafter. Early adoption would be permitted for all entities.
Footnotes
1
The new standard does not require lessees to recognize short-term leases or leases of low value on their balance sheets. Rather, lessees may elect to account for such leases on a straight-line basis in a manner similar to the current accounting for operating leases.