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Leases Pre IFRS 16

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Leases Pre IFRS 16

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  • June 2, 2022 at 10:24 am #657126
    james8500
    Participant
    • Topics: 49
    • Replies: 9
    • ☆☆

    Trying to figure out the benefits for the investor of IFRS 16 re a question I was doing.

    Did entities with ‘off-balance sheet financing’ recognise the asset without recognising the lease liability before IFRS 16? Or neither?

    Thanks

    June 3, 2022 at 7:05 am #657179
    Stephen Widberg
    Keymaster
    • Topics: 12
    • Replies: 2843
    • ☆☆☆☆☆

    Pre IFRS 16, the lessee only capitalised leases where the lease term was for the majority of asset life. So most office leases were not capitalised. Therefore the related lease debt was not on the balance sheet.

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