IASB offers multiple methods for implementing the IFRS 16. Organizations must apply the same full or modified retrospective approach to all leases.
Under the full retrospective approach, companies apply the new standard retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimate and Errors. This approach
In the financial statements for the year ended 31 December 2019, you present your leases under IFRS 16, including the comparative information – year 2018.
Calculates ROU Assets and Lease Liabilities as if IFRS 16 was only in effect as of the Date of Initial Application, using the original Incremental Borrowing Rate as of that date.
Does not restate comparative prior financial information; Instead, the lessee recognizes the cumulative effect of initially applying the standard as an adjustment to equity at the date of initial application.
Recognizes an adjustment in equity at the beginning of the earliest period presented. You book the adjustment in equity on 1 January 2019.
There are two approaches for the modified retrospective method:
Option 1 -- The program retrospectively calculates the legacy lease schedule as if IFRS always applied, using an initial borrowing rate appropriate for the transition date.
Option 2 -- The program calculates the remaining Lease Liability going forward from the Classification Date.
To specify the method that the Lease Classification Wizard will use:
IFRS16_RetrospectiveApproach
application parameter. If you set this parameter to Full, the Lease Classification Wizard displays a value of "Full" for the IASB Retrospective Method field on the Step 1 tab of the Wizard, and the field is non-editable. This setting applies to all leases.Copyright © 1984-2019, ARCHIBUS, Inc. All rights reserved. |