Preparing For IFRS 16 – Bringing Leases Into Your Balance Sheet

Leases have long been favoured as a form of off-balance sheet financing. But that's set to change from 1 January 2019 when IFRS 16 comes into effect. The implications for businesses are significant and now is the time to act.

IFRS 16, the new lease standard, will impact virtually every business around the globe. It calls for lessees to incorporate leased assets into balance sheets, recording both the right to use the asset and the liability for lease payments.

Although IFRS 16 was a long time in the making, and was formally published in January 2016, the standard doesn't come into force until 1 January 2019. This gives lessee companies less than three years to become IFRS 16-ready, and the time to take action is now.