A Company Enters Into A 3 Year Operating Lease Agreement

If you say, you should check your current transactions to which you apply IAS 17 and compare whether the rules of IFRS 16 are changed against those specific transactions. Pay attention to operational leasing, especially as the rules have changed. Then you have to calculate — determine how these transactions are presented under the current rules (IAS 17) — as they would have been presented under IFRS 16 — calculate the differences and account for them on equity, as at the beginning of the reference period. You also need to adjust the comparisons. S. please send me all the pros and cons with IFRS 16 compared to IAS 17. God bless however, as the accounting of certain types of operating leases is changing radically, we must distinguish whether we have a lease under IFRS 16 or another service contract according to another standard. Hello Clear, yes, IFRS 16 concerns you, because instead of taking into account the prepaid rent, here you have a right to use, so you will have to have a DEBIT ROU Asset/Credit Cash debit account (or lease, but if the full rent is paid in advance, then only in cash). And then you`ll have to depreciate the ROU assets.

Landlords` billing of leases is almost un changing and can therefore be continued in the same way. If I am not mistaken, the definition of free cash flows needs to be revised to include lease payments as operational outflows. Hello Silvia, thanks for this article! It`s kind of amazing for me. I remember attending one of the seminars in my country. The speaker was a senior auditor at KPMG. He raised this issue, and at the end I ask him whether or not the treatment of rental offices is influenced by that IFRS standard.16 He was a little hesitant, but he eventually confirmed that the rental office had to be out of reach because there is no way to buy the office. But I think that`s wrong, furthermore, after reading articles, I`m pretty sure the rental office should be registered in accordance with IFRS 16. But there are still some questions that leave me perplexed: 1. In the financial explanations, we must share the long-term commitment.

As a general rule, the lease is described here.