Yakub02
Banned
IFRS 16 prescribes the accounting treatment of leased assets in the financial statements of lessees and lessors.
Lease: A contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration.
A lease is a way of obtaining a use of an asset, such as a machine, without purchasing it outright.
The company that owns the asset (the lessor) allows another party (the lessee) to use the asset for a specified period of time in return for a series of rental payments.
Background to IFRS16 Leases give lessees the right to use assets in return for the lessees accepting an obligation to make a series of payments to the owner of the asset, the lessor. The previous accounting rules set out in IAS 17:
Leases focused on identifying leases that were economically similar to purchasing the asset being leased.
When this was the case, the lease was classified as a finance lease and reported on the lessee’s statement of financial position. All other leases were classified as operating leases and were not reported on the lessee’s statement of financial position
Operating leases gave lessees the right to use assets and impose obligations on the lessee to pay fort his right in the same way as finance leases.
Lease: A contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration.
A lease is a way of obtaining a use of an asset, such as a machine, without purchasing it outright.
The company that owns the asset (the lessor) allows another party (the lessee) to use the asset for a specified period of time in return for a series of rental payments.
Background to IFRS16 Leases give lessees the right to use assets in return for the lessees accepting an obligation to make a series of payments to the owner of the asset, the lessor. The previous accounting rules set out in IAS 17:
Leases focused on identifying leases that were economically similar to purchasing the asset being leased.
When this was the case, the lease was classified as a finance lease and reported on the lessee’s statement of financial position. All other leases were classified as operating leases and were not reported on the lessee’s statement of financial position
Operating leases gave lessees the right to use assets and impose obligations on the lessee to pay fort his right in the same way as finance leases.
