In the first quarter of 2016, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) released new accounting standards on Leases — IFRS 16 and ASC 844, respectively. While the standards differed on some key points, both boards noted that they fulfill the key objective of recognition of lease-related assets and liabilities by lessees on the balance sheet to enhance transparency. These new standards, which took almost a decade to finalize, could have a significant impact on all industries. Adoption could be challenging for many entities, especially for multinational companies that have decentralized operations and report both in US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). The differences between IFRS 16 and ASC 844 could also add complexity to the implementation.
Nov 062016