The leases standard is changing
The IASB published IFRS Leases 16 in January 2016 with an effective date of January 2019.
The new standard requires lessees to recognise nearly all leases on the balance sheet which will reflect their right to use an asset for a period of time and the associated liability for payments.
Leasing is an important and widely used financing solution. It enables companies to access and use property and equipment without incurring large cash outflows at the start. It also provides flexibility and enables lessees to address the issue of obsolescence and residual value risk. In fact sometimes, leasing is the only way to obtain the use of a physical asset that is not available for purchase.
"The earlier you begin to understand what impact the new standard may have on your organisation the better prepared you will be to iron out potential issues and reduce implementation costs and compliance risk."