IFRS 16 Leases - Learn from Industry Data and Annual Reports

New lease accounting in the books of Lessor and Lessee including all the amendments as per IFRS 16/Ins AS 116

What you'll learn
Understanding of leases
Lease liability and Right of use of asset
Fixed and in-substance fixed lease payments
Guaranteed and Unguaranteed residual value
Lease Exemptions
Lessor accounting and disclosure
Lease Term
Discounting Rate
Variable Lease Payments
Lease Accounting and Disclosure
Lease Classification
Lease Modifactions
Sale and Lease Back Accounting

Requirements
Knowledge of basic accounting and financial reporting
Knowledge of basic excel is a plus but not a prerequisite
Description
The objective of IFRS 16 is to report information that (a) faithfully represents lease transactions and (b) provides a basis for users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. To meet that objective, a lessee should recognize assets and liabilities arising from a lease.

IFRS 16 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments.

Under IFRS 16, a lease is defined as a contract granting an entity the right to utilize a specific asset for a prescribed period of time in exchange for agreed-upon consideration. To determine whether a contract grants control of the asset to the lessee, the agreement must provide the following to the lessee

The right to substantially all economic benefits from the use of the asset

The right to dictate how the asset is used by the entity

At times, an organization may have a contract that seems to meet the definition of a lease but does not fall within the scope of IFRS 16. Situations where this may occur include but are not limited to

Leases of biological assets

Leases for the exploration of non-regenerative resources such as oil, gas, etc.

Service concession arrangements

Licenses of intellectual property

Concurrently, lessees reporting under IFRS 16 may choose to take advantage of practical expedients that exclude certain types of leases from capitalization. These include

Short-term leases, defined as having a term of 12 months or less at commencement and no option to purchase the leased asset

Leases of low-value assets, defined as leases for which the underlying asset’s fair value (when the asset is new) is generally less than $5,000

Who this course is for
Finance Professionals, Valuers,
Accountants
Analyst
BCOM, MCOM, MBA, CA, CFA and other Finance Professional Ccourses
Valuers