Implementation projects are costly and data requirements extensive. But a careful use of transition options and practical expedients optimize the trade-offs between cost, timing and comparability – and your company’s profit in the post-transition years.
In the past, we have seen Swiss financial institutions selling their office buildings to investors and leasing them back. With IFRS 16, lessees will now bring most leases on balance sheet. For this reason, financial institutions have to recognize a right-of-use (ROU) asset.
As leasing is an important and flexible measure of financing, e.g. of the rental of an office building, the new leases standard IFRS 16 will improve the transparency and comparability of information on off-balance sheet leases by bringing them onto the balance sheet.