engleski

Implications of the new accounting model for leases

Leases often appear to be a practical way of securing some property. Th e advantage of the lease is in easy replacement and minimum engagement of resources for the acquisition of assets. However, sometimes leases, depending on their form, also serve to hide the fi nancing through the so-called “off -balance fi nancing”. With the aim of eliminating these unwanted eff ects, the IASB has adopted a new standard for leases – the International Financial Reporting Standard 16 Leases. Th e key change from the previous accounting model for lease recognition is in the fi nancial statements of the lessee. Th is change results in recognition of lease liabilities for practically all forms of leases. Of course, this also entails recording the appropriate property item of asset in the fi nancial statements. Th e result of this approach is also signifi cantly diff erent recognition of expenses during rental time, as well as the nature of expense. Th is applies particularly to operating leases that do not recognize assets and liabilities in the existing model, and the eff ect on profi t and loss is based on a linear model that most often corresponds to the contractual lease payment dynamics. In this paper the authors research the implication of the new accounting model for leases on fi nancial statements

Lease, operating, fi nancial, IFRS 16, present value, discounting

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