New Accounting Rules on Leases
New accounting rules on leases (IFRS 16) will be effective from January 2019 so as to create more transparency to the investors and analysts.
What’s the impact of the new rules?
The leases will be on the balance sheet. This new rule came about from the 2011 case where a company filed for bankruptcy and had US$2.8 billion on off balance sheet leases, which is about seven times its reported debt.
The impact of this new rule is great and will impact a company’s administrative system and its processes.
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