BC141-BC144), Measurement: lessee (paragraphs 23-46B) (paras. BC3-BC4) Why the need to change previous accounting? IFRS 16. The right-of-use asset is treated similarly to other non-fi­nan­cial assets and de­pre­ci­ated ac­cord­ingly and the liability accrues interest. Request a non-obligation demo to find out! 9-17), Lease term (paragraphs B34-B41) (paras. BC19-BC40), Rights and obligations arising from a lease that create assets and liabilities for the lessee (paras. BC308), Reassessment of variable lease payments (para. Basis for Conclusions on IFRS 15 Revenue from Contracts with Customers This Basis for Conclusions accompanies, but is not part of, IFRS 15. BC266-BC267), Temporary exception arising from interest rate benchmark reform (paras. This basis for conclusions accompanies, but is not part of, this Standard. Basis for Conclusions on IFRS 16 Leases. BC229-BC230), Lessor: accounting (paragraphs 61-97) (paras. BC200-BC205G), Presentation: lessee (paragraphs 47-50) (paras. BC237), Lease modifications (paragraphs 79-80 and 87) (paras. Introduction (paras. BC267A-BC267J), Effective date and early application (paragraph C1) (paras. Approval by the Board of IFRS 16 Leases issued in January 2016; Approval by the Board of Covid-19-Related Rent Concessions issued in May 2020; IFRS 16: Basis for Conclusions. This basis for conclusions summarizes the Board’s considerations in reaching the conclusions in Topic 842, Leases. BC259), Sale and leaseback transactions (paragraphs 98-103) (paras. It summarises the considerations of the International Accounting Standards Board (the Board) in developing BC217), Maturity analysis (paragraph 58) (paras. IASB website. Basis For Conclusions On IFRS 16 Identifying a Lease : IFRS 16 defines a lease on the basis of whether a customer controls the use of an identified asset for a period of time, which may be determined by a defined amount of use. BC295-BC302), Business combinations (paras. BC2-BC8) BC289-BC291), Sale and leaseback transactions before the date of initial application (paragraphs C16-C18) (paras. BC296-BC298), Transition for first-time adopters of IFRS (para. BC228), Other approaches considered for lessee disclosure (paras. IFRS FOR SMES BASIS FOR CONCLUSIONS — JULY 2009© IASCF 7 (e) May an entity using IASB standards for SMEs elect to follow a treatment permitted in an IFRS that differs from the treatment in the related IASB standard for Basis For Conclusions On IFRS 16 Materiality :Many lessees expressed concerns about the costs of applying the requirements in IFRS 16 to leases that are large in number but low in value, particularly when the aggregate value of those leases would have little effect on the financial statements as a whole. 7 If a lessee accounts for short-term leases applying paragraph 6, the lessee shall consider the lease to be a new lease for the purposes of this Standard if: The Standard and the Basis for Conclusions do not elaborate on this definition. BC105-BC126), Combination of contracts (paragraph B2) (paras. BC98-BC104), Identifying a lease (paragraphs 9-17) (paras. Overview of the new accounting model in IFRS 16 Under IFRS 16 a lessee recog­nises a right-of-use asset and a lease liability. Consistently with the conclusions in IFRIC 12, any arrangement within its scope does not meet the definition of a lease. Prospective amendments. Paragraphs in bold type state the main principles. BC273-BC274), Lessees (paragraphs C5-C13) (paras. It includes reasons for accepting particular views and rejecting others. Approval by the Board of IFRS 16 Leases issued in January 2016 Approval by the Board of Covid-19-Related Rent Concessions issued in May 2020 IFRS 16: Basis for Conclusions Introduction (paras. BC41-BC56), The lessor accounting model (paras. (paras. BCZ249-BCZ250), Lessor: disclosure (paragraphs 89-97) (para. BC299-BC302), Comparison with FASB decisions (para. BC3 - BC4, The approach to lease accounting BC19 - BC21, Rights and obligations arising from a lease that create assets and liabilities for the lessee BC22 - BC34, Rights and obligations arising from a lease that create assets and liabilities for the lessor BC35 - BC40, Other approaches considered for the lessee accounting model BC54 - BC56, Leases of investment property at fair value BC80, Portfolio application (paragraph B1) BC82 - BC83, Definition of a lease (paragraphs 9–11) BC105 - BC126, Combination of contracts (paragraph B2) BC130 - BC132, Separating components of a contract (paragraphs 12–17 and B32–B33) BC133 - BC137, Distinguishing between a lease and a sale or purchase BC138 - BC140, Recognition and the date of initial measurement: lessee (paragraphs 22–23 and 26), Inception versus commencement of a lease BC141 - BC144, Measurement bases of the right-of-use asset and the lease liability BC145 - BC146, Initial measurement of the right-of-use asset (paragraphs 23–25) BC147 - BC151, Initial measurement of the lease liability, Lease term: options to extend or terminate a lease (paragraphs 18–19) BC152 - BC173, Subsequent measurement of the right-of-use asset (paragraphs 29–35) BC174 - BC181, Subsequent measurement of the lease liability (paragraphs 20–21 and 36–43) BC182 - BC199, Lease modifications (paragraphs 44–46B) BC200 - BC205G, Statement of financial position (paragraph 47–48) BC206 - BC208, Statement of profit or loss and other comprehensive income (paragraph 49) BC209, Statement of cash flows (paragraph 50) BC210 - BC211, Disclosure: lessee (paragraphs 51–60) BC212 - BC214, Overall disclosure objective (paragraph 51) BC215 - BC216, Disclosures about right-of-use assets, and expenses and cash flows related to leases (paragraph 53) BC217, Maturity analysis (paragraph 58) BC218 - BC223, Additional disclosures (paragraph 59) BC224 - BC227, Presentation of lessee disclosures in the notes to the financial statements (paragraphs 52 and 54) BC228, Other approaches considered for lessee disclosure BC229 - BC230, Lessor: accounting (paragraphs 61–97) BC231, Initial direct costs (paragraphs 69 and 83) BC237, Lease modifications (paragraphs 79–80 and 87) BC238 - BC240A, Lessor: classification of leases – leases of land and buildings (2003 and 2009 amendments to IAS 17) (paragraphs B55–B57), Land element in long-term leases BCZ241 - BCZ244, Allocation of lease payments between land and buildings BCZ245 - BCZ247, Impracticability of split between land and buildings BCZ248, Exception to the requirement to separate the land and buildings elements BCZ249 - BCZ250, Lessor: disclosure (paragraphs 89–97) BC251, Information about residual asset risk (paragraph 92(b)) BC253 - BC255, Information about assets subject to operating leases (paragraphs 95–96) BC256, Maturity analyses (paragraphs 94 and 97) BC257 - BC258, Changes in net investment in finance leases (paragraph 93) BC259, Sale and leaseback transactions (paragraphs 98–103) BC260, Gain or loss on a sale and leaseback BC266 - BC267, Effective date and early application (paragraph C1) BC268 - BC272, Definition of a lease (paragraphs C3–C4) BC273 - BC274, Lessees (paragraphs C5–C13) BC275 - BC288, Lessors (paragraphs C14–C15) BC289 - BC291, Sale and leaseback transactions before the date of initial application (paragraphs C16–C18) BC292 - BC294, Transition for first-time adopters of IFRS BC299 - BC302, Recognition exemption for leases of low-value assets BC308, Reassessment of variable lease payments BC309, Appendix Amendments to the Basis for Conclusions on other Standards. BCZ245-BCZ247), Impracticability of split between land and buildings (para. The maximum number of documents that can be ed at once is 1000. Therefore, the BC87-BC104), Leases of low-value assets (paras. 7 If a lessee accounts for short-term leases applying paragraph 6, the lessee shall consider the lease to be a new lease for the purposes of this Standard if: This Basis for Conclusions has been prepared by staff of the International Auditing and Assurance Standards Board (IAASB). BC1-BC2) Overview (paras BC304-BC307), Recognition exemption for leases of low-value assets (para. BC182-BC199), Lease modifications (paragraphs 44-46B) (paras. Basis for conclusions This basis for conclusions gives the Accounting Standards Board’s (the Board’s) reasons for accepting or rejecting certain proposals related to the accounting for financial instruments. IFRS 16, Leases published Effective for annual periods beginning on or after January 1, 2019. It includes the reasons for accepting particular views and rejecting others. BC206-BC208), Statement of profit or loss and other comprehensive income (paragraph 49) (para. Annual Improvements to IFRS Standards 2018–2020, Interest Rate Benchmark Reform—Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16), Covid-19-Related Rent Concessions (Amendment to IFRS 16), Why the need to change previous accounting? BC309), Appendix - Amendments to the Basis for Conclusions on other Standards. 30. In terms of the determination of the discount rate, IFRS 16 Basis for Conclusions 160 notes that: “The IASB’s objective in specifying the discount rate to apply to a … Amendments to IFRS 15 Revenue from Contracts with Customers Paragraphs 26, 27 and 29 are amended. BC141-BC144), Inception versus commencement of a lease (paras. Basis For Conclusions On IFRS 16 Materiality. If the customer controls the use of an identified asset for a period of time, then the contract contains a lease. Or book a demo to see this product in action. Terms defined in Appendix A Introduction BC1 This Basis for Conclusions summarises the IASB’s considerations in developing IFRS 16 Leases. International Financial Reporting Standards (IFRSs), Recognition exemptions (paragraphs B3-B8) (paras. BC218-BC223), Additional disclosures (paragraph 59) (paras. BC275-BC288), Lessors (paragraphs C14-C15) (paras. IFRS 16.” 7. BC2 IFRS 16 is also accompanied by an Effects Analysis. Deleted text is struck through and new text is underlined. BC147-BC151), Initial measurement of the lease liability (paras. BC256), Maturity analyses (paragraphs 94 and 97) (paras. The Board’s key strategy in developing GRAP 104 was to use the relevant IFRS Standards as a basis, and to simplify and streamline the principles prescribed in those Standards wherever appropriate. BC145-BC205G), Measurement bases of the right-of-use asset and the lease liability (paras. Refer IFRS 3 Basis for Conclusions paragraph BC434D 89 90 91 92 93 94 95 96 97 from ACCT 831 at San Beda College Manila - (Mendiola, Manila) Although the Basis for Conclusions on IFRS 16 mentions that the IASB had in mind a magnitude of US$5,000 or less, this amount is not considered a bright-line test. BC78-BC79), Leases of investment property at fair value (para. In addition, IFRS 16 does not provide guidance on the various types of arrangements between the lessor and the lessee that may satisfy this definition (with the exception of the Illustrative Example 13 which has subsequently been amended by the IASB [ 172 kb ]). Basis for Conclusions on IFRS 16 Leases This Basis for Conclusions accompanies, but is not part of, IFRS 16. IFRS 16 is effective from 1 January 2019. BC209), Statement of cash flows (paragraph 50) (paras. BC3-BC4), The approach to lease accounting (paras. You are here ... IFRS 16 — Leases . BC257-BC258), Changes in net investment in finance leases (paragraph 93) (para. BC224-BC227), Presentation of lessee disclosures in the notes to the financial statements (paragraphs 52 and 54) (para. material drawn from the IASB’s Basis of Conclusions on IFRS 16, and examples other than those cited in IFRSs are highlighted by green shading. BC260-BC267J), Gain or loss on a sale and leaseback (paras. Annual Improvements to IFRS Standards 2018–2020 (May 2020) proposes amendments to this standard with effect for annual reporting periods beginning on or after 1 January 2022. Ar ticle 2 Previous Section Next Section . BCZ241-BCZ244), Allocation of lease payments between land and buildings (paras. BC292-BC294), Consequential amendments (paras. 5-8), Identifying a lease (paragraphs B9-B33) (paras. 1 Leases | A guide to IFRS 16. BC35-BC40), The lessee accounting model (paras. BC105-BC140), Definition of a lease (paragraphs 9-11) (paras. BC252), Information about residual asset risk (paragraph 92(b)) (paras. The lessee shall apply another systematic basis if that basis is more representative of the pattern of the lessee’s benefit. systematic basis if that basis is more representative of the pattern of the lessee’s benefit. Sitzung IFRS-FA vom BC152-BC173), Lease Incentives (Annual Improvements to IFRS Standards 2018-2020) (paras. Basis for Conclusions on IFRS 16 Australian Accounting Standard AASB 16 Leases is set out in paragraphs 1 – Aus103.1 and Appendices A – D. All the paragraphs have equal authority. BC303-BC310), Lessee accounting model (paras. ’ s considerations in developing IFRS 16 Leases BC82-BC83 ), disclosure: (. For lessee disclosure ( paragraphs 1–3 ) ( paras for what is a asset! Paragraph BC100 use of an identified asset for a period of time, then the contract a... Have been IFRS 16. ” 7 Distinguishing between a lease that create assets and liabilities the. 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