Handbook – IASB IFRS 16 Lease Accounting Standard

The first effective dates for the international lease accounting standard, IFRS 16, were in January 2019. The standard requires that all leases be reported as finance leases unless the lease term is less than 12 months or the value of the lease is less than US$5000. The on-balance sheet requirement of the standard created an implementation challenge for many companies. The challenge is exacerbated for companies with large equipment leasing portfolios because equipment leasing programs are typically decentralized, making it difficult to track down the data needed to comply with the standards.