Podcast
Questions and Answers
Which standard does IFRS 16 replace?
Which standard does IFRS 16 replace?
- IFRS 16 (correct)
- IFRS 13
- IFRS 15
- IFRS 9
What is the objective of IFRS 16?
What is the objective of IFRS 16?
- To ensure that lessees and lessors provide relevant information that faithfully represents those transactions. (correct)
- To establish principles for the recognition, measurement, presentation, and disclosure of leases.
- To provide guidelines for subleases.
- To replace the existing lease accounting standards.
Which leases does IFRS 16 apply to?
Which leases does IFRS 16 apply to?
- All leases, including subleases. (correct)
- Only leases with a lease term of 12 months or less.
- Only leases of intangible assets.
- Only leases that are recognized as expenses on a straight-line basis.
Can a lessee choose to account for lease payments as an expense on a straight-line basis?
Can a lessee choose to account for lease payments as an expense on a straight-line basis?
Are leases of intangible assets covered by IFRS 16?
Are leases of intangible assets covered by IFRS 16?
Flashcards
IFRS 16 replaces which standard?
IFRS 16 replaces which standard?
IFRS 16 replaces previous lease accounting standards.
What's the goal of IFRS 16?
What's the goal of IFRS 16?
IFRS 16 aims for transparent financial reporting of lease transactions.
What leases does IFRS 16 cover?
What leases does IFRS 16 cover?
IFRS 16 applies to all leases, including subleases.
Can lessees expense leases in a straight line?
Can lessees expense leases in a straight line?
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Does IFRS 16 cover intangible asset leases?
Does IFRS 16 cover intangible asset leases?
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Study Notes
IFRS 16 Overview
- IFRS 16 replaces IAS 17, the previous standard for lease accounting.
Objective of IFRS 16
- The objective of IFRS 16 is to provide a single, consistent lessee accounting model for all leases.
Applicability of IFRS 16
- IFRS 16 applies to all leases, except for leases of: • Biological assets • Insurance contracts • Leases of certain intangible assets (e.g., licenses of software, copyrights) • Leases of exploration for, or use of, minerals, oil, natural gas, and other non-regenerative resources.
Accounting for Lease Payments
- A lessee can choose to account for lease payments as an expense on a straight-line basis, but this is only an exemption for leases with a lease term of 12 months or less, or for leases with an underlying asset of low value.
Exclusions from IFRS 16
- IFRS 16 does not cover leases of intangible assets, except for certain cases, such as leases of intangible assets embedded in a physical asset.
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