Your Shortcut to Success for IASB Accounting

Avoid the Roadblocks of the Updated
IASB IFRS 16 Accounting Standard

When the International Accounting Standards Board (IASB) issued IFRS 16, the goal was to increase the accuracy of financial reporting so investors could better understand the business. It's a big change: IFRS 16 holds to a single lessee accounting model. It requires the lessee recognize assets and liabilities for all leases with a term of more than 12 months.

And while the IASB shares many of the same characteristics and processes as its sister organization the Financial Accounting Standards Board (FASB), there are significant differences between ASC 842 and IFRS 16:

•   IASB IFRS 16 accounting only requires a single model for lease classification

•    IASB IFRS 16 offers exemptions on short-term and low-value leases

•   Companies will expense all leases like finance leases, creating an impact on the profit/loss statement

•  Companies can forgo the comparative reporting requirements

•    IFRS 16 allows two alternatives for measuring a right-of-use asset

•    With practical expedients, companies may apply a single discount rate to a portfolio of leases