IFRS 16 Leases standard brings £2.2 trillion big ticket leases onto balance sheet

The long-debated leasing standard, IFRS 16, Leases, now released by the International Accounting Standards Board (IASB), is set to transform the accounting rules for lease agreements with a major impact on the P&L, key performance indicators (KPIs) and reporting as leases come onto the balance sheet for the first time from 2019.

The new standard will affect half of listed companies reporting under International Financial Reporting Standards (IFRS), when leases have to be accounted for on the balance sheet as assets and liabilities, affecting cashflow, although the accounting mechanism will be relatively straightforward.