Financing leases vs operating leases (IFRS 16) Flashcards
1
Q
Was ist IFRS 16?
A
Under the lessee accounting model under IFRS 16, there is no longer a classification distinction between operating and finance leases. Instead, a single model approach now exists whereby all lessee leases post-adoption are reported as finance leases. These leases are capitalized and presented on the balance sheet as assets, known as the right-of-use (ROU) asset, and liabilities, unless subject to any of the exemptions prescribed by the standard.
Similar to finance lease accounting under IAS 17, the accounting treatment for finance leases under IFRS 16 results in the recognition of both depreciation and interest expense on the income statement.
