IFRS 16, published by the International Accounting Standards
Board, came into effect on 1 January 2019. Most organisations
operating in Asia Pacific are aware of this new standard but may
not be aware how best to make the transition.
This article was originally published by Future CFO.
The new leases standard will affect most companies in the
region, because – simply put – most companies use
rentals or leasing to access assets as it is a popular financing
solution. It allows companies across all sectors to use property
and equipment without incurring material initial cash outflows. In
an effort to boost transparency, IFRS 16 eliminates the distinction
between finance leases, which were previously capitalised on
corporate balance sheets, and operating leases, which were not.
