The long-awaited leasing standard has been released by global standard-setter, the International Accounting Standards Board, finally after nearly a decade of review and deliberation. Despite protracted talks, full convergence with the US was not achieved and the US GAAP version is yet to be released.

From 2019, for the first time operating leases come on to the balance sheet under IFRS 16, Leases, removing the differential treatment between finance and operating leases. After so much debate over the scope of the standard, reaction from accountants was reasonably upbeat – replacing IAS 16, Property, Plant and Equipment, is not unreasonable – the standard was released in the early 1990s.

Expecting the worst means that the standard offers some respite to company preparers who initially expected a much harsher approach to on balance sheet lease reporting, capturing all types of lease – the final result will capture big tickets item only.