International Financial Reporting Standard 16

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The International Financial Reporting Standard 16 - Leases ( IFRS 16 ) is an accounting regulation of the IASB . IFRS 16 replaces IAS 17 and the interpretations IFRIC 4, SIC 15 and SIC 27.

introduction

The International Financial Reporting Standard 16 Leases ( IFRS 16 ) is an international accounting standard (IFRS) of the International Accounting Standards Board (IASB), which regulates the accounting of leases. It is to replace the currently valid International Accounting Standard 17 from January 1, 2019 . The biggest change in the new standard is that in future lessees will have to activate almost all leasing transactions .

development

A change to the existing regulations for accounting for leases was first included in the work program of the IASB in June 2006. In 2009 the first discussion paper "Leases: Preliminary Views" on the subject was published. Finally, a year later, the first draft standard was presented. The final standard was finally published on January 13, 2016. The project was originally started jointly by the International Accounting Standards Board (IASB) and the American Financial Accounting Standards Board (FASB). The collaboration led to IFRS 16 of the IASB and ASC 842 according to US GAAP . In the final standards, the IASB and FASB were able to agree on a uniform definition of leasing transactions. Both bodies also implemented a similar approach to the valuation of lease liabilities and the approach to finance leasing transactions in the new standards. There were no major changes to the lessor's accounting. In the finalized standards, however, the IASB and FASB could not reach an agreement on the accounting for lessees. While a leasing model was implemented in IFRS 16, in which basically all leasing transactions are to be shown in the balance sheet, ASC 842 still distinguishes between operating leases and capital leases .

The application of IFRS 16 is mandatory for all fiscal years beginning on January 1, 2019. If IFRS 15 is already being applied, companies can apply IFRS 16 earlier.

The concept of the lease

A lease is defined in IFRS 9.16 as an agreement under which the lessor to the lessee in return the right to use an identified asset ( Identified asset transfers) for an agreed period. The identified asset is particularly important in the redefinition. This exists when it is explicitly defined in the contract. An identified asset does not exist if the lessor has a substantial right to exchange the asset (the lessor can exchange the leased object during the entire term and has an economic advantage through this option).

Classification of Leases

In contrast to its predecessor, IFRS 16 no longer differentiates between finance leases and operating leases for the lessee . As a result, the previously off-balance accounting is only possible to a limited extent. In contrast to on-balance accounting, off-balance means that leased objects are not shown in the balance sheet .

Accounting

Until now, a distinction was made between finance leasing and operational leasing. With finance leasing, all risks and rewards associated with ownership of the leased object are transferred to the lessee. The lessee accounts for the asset ( on-balance ). With operational leasing, the main opportunities and risks associated with the use of the asset remain with the lessor. Only short-term liabilities are shown on the balance sheet.

With the new IFRS 16, leasing obligations on the one hand and the right-of-use on the other hand must be shown in the balance sheet. Exceptions are leasing liabilities with a term of less than twelve months and low-value leasing contracts.

Effects

Operating leasing has so far been more like a rental agreement. In the assets no asset was recognized on the liabilities no liability. The lease payments were booked as an expense. With the change to on-balance leasing, leasing transactions must now be shown on the assets side as a right-of-use and on the liabilities side as a leasing liability . As a result, companies that have previously mainly accounted for operating leasing are increasing their debt and reducing their equity ratio. Some industries are therefore particularly hard hit by the change.

Accounting for leases

Accounting options

In the case of leases that are short-term ( short-term leases ) or of low value ( underlying asset is of low value ), there is an option to continue to map the leasing transactions off-balance.

Accounting by the lessee

The lessee ( lessee ) has to account for the leasing value as an asset from a right-of-use asset; RoU for short. The RoU is accounted for in the amount of the acquisition costs and is to be amortized over the shorter period of lease term and economic useful life. On the liabilities side, the RoU is compared with a leasing liability. The value of the ROU than the amount of the original lease liability, including payments already made less incentives ( lease incentives ), plus initial direct costs ( initial direct costs ) expel (IFRS 16:24). The discounted amount of all upcoming lease payments is recognized as the lease liability.

Accounting at the lessor

The lessor ( Lessor ) further distinguishes between finance leases and operating leases.

Finance leasing

With finance leasing, all risks and rewards associated with ownership of the leased object are transferred to the lessee. The lessor has to capitalize a receivable equal to the net investment in the lease. Incoming lease payments are to be recorded as capital repayment and financial income.

Operating leasing

With operating leasing, the main opportunities and risks in connection with the use of the asset remain with the lessor. The leased property is capitalized as an asset on the balance sheet. These assets are written off in accordance with the provisions of IAS 16 or IAS 38 . Income from the leasing installments is to be collected on a straight-line basis.

literature

See also

Individual evidence

  1. ↑ a b c d IFRS 16 , at www.iasplus.com , accessed on January 31, 2017
  2. ^ V. Leasing (IAS 17) . In: IFRS Handbook . Publishing house Dr. Otto Schmidt, Cologne 2012, ISBN 978-3-504-38147-9 , doi : 10.9785 / ovs.9783504381479.306 .
  3. ↑ IFRS 16: Future of Lease Accounting - No more “off-balance” , at www.roedl.de , accessed on January 31, 2017
  4. ↑ Leasing accounting: The end of the off-balance , at www.finance-magazin.de , accessed on January 31, 2017
  5. ↑ Future IFRS lease accounting: How many of the aircraft are currently “off-balance” and what will (not) change in the future? , accessed on September 28, 2018.