Insights

Last Friday the International Accounting Standards Board (IASB) published an Exposure Draft ‘COVID-19-Related Rent Concessions - Proposed amendment to IFRS 16’ (the ED). What are the main changes outlined?

As the impact of a novel strain of coronavirus (COVID-19) continues to unfold around the world, those individuals responsible for preparing financial statements and approving them for issue need to be cognisant of not only what has happened and is happening at the reporting date and the time the financial statements are approved, but also what is likely to happen next.

The novel coronavirus (COVID-19) pandemic is spreading around the globe rapidly. The virus has taken its toll on not just human life, but businesses and financial markets too, the extent of which is currently indeterminate. Entities need to carefully consider the accounting implications of this situation.

IFRS news is your quarterly update on things relating to International Financial Reporting Standards (IFRS). We’ll bring you up to speed on topical issues and significant developments, provide comments and give our point of view.

IFRS 16 makes significant changes to sale and leaseback accounting. A sale and leaseback transaction is one where an entity (the seller-lessee) transfers an asset to another entity (the buyer-lessor) for consideration and leases that asset back from the buyer-lessor.

Under IFRS 16 ‘Leases’, discount rates are used to determine the present value of the lease payments used to measure a lessee’s lease liability.

On 22 December 2017, the President of the United States signed into law the ‘Tax Cuts and Jobs Act’. The Act is a sweeping reform of US taxation which is likely to have a significant impact on financial statements prepared under IFRS for entities with US operations.

The new IFRS 16: Leases standard has been issued by the IASB. The core principle of the new standard is that lessees should recognise all leases on their balance sheet.

The IASB has published 'Annual Improvements to IFRSs 2014-2016 Cycle' which addresses non-urgent (but necessary) minor amendments to three Standards, as described below.

This issue of IFRS News starts by looking at some of the potential financial reporting implications of the UK’s decision to leave the European Union. We also touch on the amendments and proposed amendments the IASB has recently made to its Standards.

On 13 January 2016 the IASBreleased IFRS 16 'Leases', completing its long-running project on lease accounting. IFRS 16 will require lessees to account for leases 'on-balance sheet' by recognising a 'right-of-use' asset and a lease liability.

This special edition of IFRS News explains the key features of the new Standard and provides practical insights into its application and impact.