Introduction to IFRS 16 Leases (Cancelled)

The new IFRS on leases is expected to have a significant impact on many companies – virtually all leases will now need to be recognised on the balance sheet, with profit or loss and cash flow impacted by new requirements as well.

This workshop introduces the fundamentals of the new standard and some of the practical considerations for implementation.

Learning objectives 

Participants will have the opportunity to increase their knowledge of the requirements of the new standard, which has introduced a new definition of a lease and new accounting for lessees.

The seminar provides preparers and auditors with an opportunity to learn more about both the theory and practical application in an interactive environment with an expert speaker.

Course Content 

• Scope: We will explain the scope of the new standard, including what is outside the scope and exemptions which are available.
• Definition of a lease: We will explain the new definition, and walk through the process to determine when this is met. We will look at when an asset can be identified, including the effect of substitution rights, and when there is a right to direct how and for what purpose the asset is used, including consideration of protective rights.
• Lessee accounting: We will explain the mechanics of the new lessee accounting model, including initial recognition, subsequent measurement and presentation of the lease asset and liability. We will examine practical challenges of applying the model, including variable lease payments, discount rates and how to account for lease modifications.
• Lease term: We will explain how to determine the lease term, what to consider for extension and termination options and what is “reasonably certain”
• Lessor accounting: We will provide an overview of the accounting model brought forward from the old IAS 17 Leases, and new rules for sub-leases.
• Transition: We will provide an overview of the requirements for both lessees and lessors. This will include both the fully-retrospective and modified-retrospective approaches for lessees, and the practical expedients available.
• Separation of components: We will examine the criteria for identifying separate components within agreements, how to allocate consideration and what practical expedients are available.
• Combining contracts: We will explain the rules for combining contracts.
• Sale and leaseback: We will examine the criteria for assessing whether a sale has occurred and the accounting model in either scenario.
• Disclosure: We will provide an overview of the new increased disclosure requirements, and what to consider both before and after transition.

Who should attend

• Accountants/auditors
• Non-financial executives and directors with an active role in preparing, analyzing and presenting financial statements.