The latest IFRS 16 Leases standard, effective from 1 January 2019, will have a significant impact on company balance sheets and there are various implementation options, explains Andrew Marshall, senior technical partner at KPMG UK, so transition planning is critical
We are now a long way through the first wave of 2018 reporting as the 31 December 2017 preliminary announcements have been emerging.
Many companies are looking reasonably advanced with their preparations for the new International Financial Reporting Standards (IFRS) – IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments - which are applicable in 2018, some have work still to do.
Before everyone sits back and relaxes, they should not forget that there is another new standard looming over the horizon, being IFRS 16 Leases. For many companies this is the one of the three which will have the most fundamental impact on their report and accounts. As a reminder, IFRS 16 is applicable from 1 January 2019, ie, next year. Depending on the transition option taken, this can require a lot of detailed work in sifting through lease contracts.
