Schedule 14 of this year’s Finance Act impacts lessees accounting under IFRS 16 for periods of account starting on or after 1 January 2019. IFRS 16 brings operating leased assets onto the balance sheet of the lessee for the first time and the resulting transitional adjustments must be spread for tax purposes over the average remaining life of the relevant leases. In other respects it should normally still be possible to follow the P&L entries for tax. The change is already having significant impact on reported results of listed companies and industry sectors most affected are likely to include oil telecoms retail banks airlines and car users.
Early adopters
While the basic approach is clear for normal adopters of IFRS 16 those who early adopt have a different analysis to follow. They are required to continue with the frozen GAAP basis for 2018 so...
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Schedule 14 of this year’s Finance Act impacts lessees accounting under IFRS 16 for periods of account starting on or after 1 January 2019. IFRS 16 brings operating leased assets onto the balance sheet of the lessee for the first time and the resulting transitional adjustments must be spread for tax purposes over the average remaining life of the relevant leases. In other respects it should normally still be possible to follow the P&L entries for tax. The change is already having significant impact on reported results of listed companies and industry sectors most affected are likely to include oil telecoms retail banks airlines and car users.
Early adopters
While the basic approach is clear for normal adopters of IFRS 16 those who early adopt have a different analysis to follow. They are required to continue with the frozen GAAP basis for 2018 so...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
