![]() Operating Lease Accounting treatment for a finance lease ![]() ‘Lessee’ in a lease is the party who rents the asset whereas ‘lessor’ is the party who grants the lease.Ĭlassification of leases is dependent on whether it is a finance lease or an operating lease.įigure_1: Finance Lease vs. This standard sets out the guidelines for recognizing and subsequent disclosure requirements for leases (agreement where one party rents out land, building etc. Side by Side Comparison – IAS 17 vs IFRS 16 The key difference between IAS 17 and IFRS 16 is that according to the old standard (IAS 17) operating leases are not capitalized whereas they are considered as capitalized assets and recorded in the balance sheet under IFRS 16.Ĥ. Both IAS 17 and IFRS 16 are regarding Leases where IAS 17 is the old standard which was replaced by IFRS 16. In the event of any contradictions, IAS standards are superseded by IFRS standards. When the IASB was established in 2001, it agreed to adopt all IAS standards, and name future standards as IFRS (International Financial Reporting Standards). ![]() International Accounting Standards Committee (IASC) founded in 1973 introduced a series of accounting standards named International Accounting Standards ( IAS) which were in practice until the incorporation of the International Accounting Standards Board (IASB) in 2001.
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