IASB Retrospective Method

IASB offers multiple methods for implementing IFRS 16 guidance. Organizations must apply the same full or modified retrospective approach to all leases.

The approaches are:

Full Retrospective - Under the full retrospective approach, companies apply the new standard retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimate and Errors.
Modified Retrospective - You can choose on a lease-by-lease basis how to measure the ROU asset value:
- Option 1 --The program retrospectively calculates the legacy lease schedule as if IFRS 16 always applied, using an initial borrowing rate appropriate for the transition date.
- Option 2 -- Based on Remaining Lease Liability

To specify the method that the Lease Classification Wizard should use, set the IFRS16_RetrospectiveApproach application parameter.